On Dec. 20, mobile gadget designer Research In Motion (NASDAQ:RIMM) released third-quarter 2008 earnings for the period ended Dec. 1.

  • The revenue growth continues unabated, this time 22% over the take from the previous quarter and twice the sales of the year-ago period.
  • Net and operating margins came up aces, at levels not seen in the past two years.
  • Just to pick a nit, this was the fifth quarter in a row of gently declining gross margins. That's an industry-wide malaise, though -- both Motorola and Nokia have experienced a similar swoon over the past year or so, as average selling prices everywhere are heading south.

(Figures in millions, except per-share data.)

Income Statement Highlights

Q3 2008

Q3 2007

Change

Sales

$1,673

$835

100.3%

Net Profit

$370

$175

111.5%

EPS

$0.65

$0.31

109.7%

Diluted Shares

573.7

569.5

0.7%

Get back to basics with the income statement.

Margin Checkup

Q3 2008

Q3 2007

Change*

Gross Margin

50.7%

54.2%

(3.5)

Operating Margin

29.3%

26.9%

2.4

Net Margin

22.2%

21.0%

1.2

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q3 2008

Q3 2007

Change

Cash + ST Invest.

$1,597

$893

78.8%

Accounts Rec.

$1,037

$449

131.2%

Inventory

$340

$216

57.4%

Liabilities

Q3 2008

Q3 2007

Change

Accounts Payable

$230

$111

107.3%

Long-Term Debt

$7.2

$6.6

9.4%

The balance sheet reflects the company's health.

Cash Flow Highlights

Q3 2008

Q3 2007

Change

Cash From Ops.

$521

$215

141.8%

Capital Expenditures

$97

$64

50.5%

Free Cash Flow

$424

$151

180.5%

Owner Earnings

$322

$146

120.9%

Free cash flow is a Fool's best friend.

Competitive Context

Market Cap

Trailing P/E Ratio

CAPS Rating

Apple (NASDAQ:AAPL)

$169,130

49.1

****

Nokia (NYSE:NOK)

$148,330

16.1

*****

Research In Motion

$66,300

77.4

***

Motorola (NYSE:MOT)

$37,220

81.0

**

Palm (NASDAQ:PALM)

$677

39.9

*

Using the latest reported numbers from Capital IQ.

Keep your partners close and the competition in your vest pocket.

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Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, Fool contributor Anders Bylund had no position in any company mentioned. Palm is a Motley Fool Stock Advisor recommendation. Fool rules are here.