On Wednesday, Aug. 30, digital video provider SeaChange International (NASDAQ:SEAC) released second-quarter 2007 earnings for the period ending July 31, 2006.

  • You rarely see a company stump the analysts as thoroughly as this, on both revenue and earnings estimates.
  • Operating margins are paper-thin, but could easily expand by holding back increases in R&D expenses. Management chooses to put the pedal to the metal for now, to collect the benefits of that research later.
  • The emergence from the land of red ink must feel welcome, considering the amount of cash the company has burned through since last year.

(Figures in thousands, except per-share data)

Income Statement Highlights

Avg. Est.

Q2 2007

Q2 2006

Change

Sales

$37,060

$45,388

$26,195

73.3%

Net Profit

--

$643

($6,556)

N/A

EPS

($0.08)

$0.02

($0.23)

N/A

Diluted Shares

28,812

28,286

1.9%



Get back to basics with a look at the income statement.

Margin Checkup

Q2 2007

Q2 2006

Change*

Gross Margin

51.64%

35.05%

16.59

Operating Margin

1.44%

(29.28%)

30.72

Net Margin

1.42%

(25.03%)

26.45

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q2 2007

Q2 2006

Change

Cash + ST Invest.

$29,370

$99,675

(70.5%)

Accounts Rec.

$41,502

$29,762

39.4%

Inventory

$19,890

$22,851

(13.0%)



Liabilities

Q2 2007

Q2 2006

Change

Accounts Payable

$18,210

$8,728

108.6%

Long-Term Debt

$0

$0

N/A



Learn the ways of the balance sheet.

Cash Flow Highlights

Unfortunately, the company did not provide a cash flow statement.

Find out why Fools always follow the money.

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Related Foolishness:

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.

SeaChange may be breaking the rules of the media business, but it isn't considered an official Rule Breaker yet. Take a free 30-day trial to our ultimate growth stock service to see who did make the cut.

At the time of publication, Anders Bylund had no position in any of these companies. Fool rules are here .