"1-800-FLOWERS.COM Reports Revenues of $230 Million for its Fiscal 2005 Second Quarter Driven by Online Revenue Growth of 18 Percent."

When I see a headline like that, I have only one reaction: "uh-oh."

The purpose of a public company is to make money -- that is, profits -- for its shareholders. If the best thing a company can say about its quarter is that it increased sales, but it stays mum on profits, what does that portend for the rest of the earnings report?

Let's read on and see. Operating margins fell 0.1% quarter-on-quarter. Not good, but not too bad. What next? Net profits. In contrast to last year's fiscal second quarter, this year 1-800-Flowers (NASDAQ:FLWS) had to pay a substantial amount of income tax -- roughly $6 million more than last year. As a result, net profits after taxes declined a whopping 35%, from $0.20 per diluted share for Q2 2004 to $0.13 in Q2 2005. Oopsie. Better keep those numbers out of the headline.

Now pull back a bit and take a gander at the company's first-half (1H) results. Try to see the bouquet for the flowers, so to speak. The operating margin in this comparison increased a bit, by 0.1%. Net profits for 1H 2005 declined 25% in comparison to 1H 2004 (again, with a bigger income tax liability being the culprit). And free cash flow, which isn't broken down on a quarterly basis, withered on the vine, declining by more than 50% from 1H 2004's $22.6 million to just $10.7 million in 1H 2005.

If we now project that last number out to estimate 1-800-Flowers' free cash flow for the full year, we're looking at something on the order of $21.4 million for fiscal 2005. Divide that into the company's $450 million enterprise value and you'll get an enterprise value-to-free cash flow ratio of 21 for the company. And now we (finally) get to the good news.

1-800-Flowers has a return on equity of better than 27%, and the three analysts who cover the company concur in their estimates that, whatever troubles the company is facing in the short term, over the next five years it should be able to grow its earnings at a compound rate of 28% per annum. Which leads this Fool to the possibly perverse conclusion that, despite the misleading headline and the short-term drop in both net profits and free cash flow, with a EV/FCF ratio of barely three quarters of either ROE or projected earnings, 1-800-Flowers could well bloom into a promising investment.

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Fool contributor Rich Smith has no position in 1-800-Flowers.com.