On Jan. 31, global search and advertising mogul Google
- Google missed the consensus earnings target for the fourth quarter by a mere $0.01 per diluted share. To put the magnitude of the miss into perspective, imagine that the company had done a 10-for-1 stock split to put the share price in the $50 range. The miss would then have been two-tenths of a cent, or a mere rounding error.
- As early Googlers vest their stock options and cash them in, share dilution is becoming a real issue here. The company has never bought and retired a share of its own stock, and it still doesn't have any repurchase authorizations from the board of directors.
- That cash account is growing mighty fat, and it could go a long way toward correcting that dilution issue -- if the mood strikes.
- There's change afoot in the online search market, now that Microsoft
(Nasdaq: MSFT) (Nasdaq: YHOO)
(Figures in millions, except per-share data.)
Income Statement Highlights
|
FY 2007 |
FY 2006 |
Change |
|
|---|---|---|---|
|
Sales |
$16,594 |
$10,605 |
56.5% |
|
Net Profit |
$4,204 |
$3,077 |
36.6% |
|
EPS |
$13.29 |
$9.94 |
33.7% |
|
Diluted Shares |
316.2 |
309.5 |
2.2% |
Get back to basics with the income statement.
Margin Checkup
|
FY 2007 |
FY 2006 |
Change* |
|
|---|---|---|---|
|
Gross Margin |
59.9% |
60.2% |
(0.2) |
|
Operating Margin |
30.6% |
33.5% |
(2.8) |
|
Net Margin |
25.3% |
29.0% |
(3.7) |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
FY 2007 |
FY 2006 |
Change |
|---|---|---|---|
|
Cash + Short-Term Investments |
$14,219 |
$11,244 |
26.5% |
|
Accounts Receivable |
$2,163 |
$1,322 |
63.5% |
|
Liabilities |
FY 2007 |
FY 2006 |
Change |
|---|---|---|---|
|
Accounts Payable |
$282 |
$211 |
33.6% |
|
Long-Term Debt |
$0 |
$0 |
N/A |
The balance sheet reflects the company's health.
Cash Flow Highlights
|
FY 2007 |
FY 2006 |
Change |
|
|---|---|---|---|
|
Cash From Operations |
$5,775 |
$3,581 |
61.3% |
|
Capital Expenditures |
$2,403 |
$1,903 |
26.3% |
|
Free Cash Flow |
$3,373 |
$1,678 |
101.0% |
|
$2,769 |
$1,747 |
58.5% |
Free cash flow is a Fool's best friend.
Competitive Context
|
Market Cap |
Trailing P/E Ratio |
CAPS Rating (Out of 5) |
|
|---|---|---|---|
|
Microsoft |
$303,408 |
18.6 |
|
|
|
$166,323 |
39.6 |
|
|
News Corp. |
$59,290 |
18.6 |
|
|
eBay |
$35,354 |
106.2 |
|
|
Yahoo! |
$27,811 |
40.4 |
Using the latest reported numbers from Capital IQ, a division of Standard & Poor's. Keep your partners close and the competition in your vest pocket.
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