On Dec. 17, digital media expert Adobe Systems
- Sales and GAAP net income this quarter were both the highest ever reported for one Adobe quarter. Curiously, the company highlighted the revenue record every chance it got, but not so for the income mark. Que pasa, amigos?
- Management expects the operating margin to stay right around 30% throughout the next fiscal year. It's a hefty improvement over 2006, and one of the fattest operating margins you'll find in a software company not named Microsoft
(NASDAQ:MSFT) , Google(NASDAQ:GOOG) , or Oracle(NASDAQ:ORCL) . - Adobe spent $338 million on share buybacks this quarter, nearly exhausting its authorization allotment. So the board slapped another 30 million shares onto the program, or about $1.2 billion at today's share price.
(Figures in millions, except per-share data)
Income Statement Highlights
Q4 2007 |
Q4 2006 |
Change |
|
---|---|---|---|
Sales |
$911 |
$682 |
33.6% |
Net Profit |
$222 |
$183 |
21.3% |
EPS |
$0.38 |
$0.30 |
26.7% |
Diluted Shares |
588 |
602 |
(2.4%) |
Get back to basics with the income statement.
Margin Checkup
Q4 2007 |
Q4 2006 |
Change* |
|
---|---|---|---|
Gross Margin |
89.2% |
88.3% |
0.9 |
Operating Margin |
30.3% |
24% |
6.3 |
Net Margin |
24.4% |
26.9% |
(2.5) |
Margins are the earnings engine.
Balance Sheet Highlights
Assets |
Q4 2007 |
Q4 2006 |
Change |
---|---|---|---|
Cash + ST Invest. |
$1,994 |
$2,281 |
(12.6%) |
Accounts Rec. |
$318 |
$357 |
(10.8%) |
Liabilities |
Q4 2007 |
Q4 2006 |
Change |
---|---|---|---|
Accounts Payable |
$66.9 |
$55.0 |
21.5% |
Long-Term Debt |
$0 |
$0 |
N/A |
The balance sheet reflects the company's health.
Cash Flow Highlights
Q4 2007 |
Q4 2006 |
Change |
|
---|---|---|---|
Cash From Ops. |
$398 |
$291 |
36.8% |
Capital Expenditures |
$28.1 |
$33.1 |
(15%) |
Free Cash Flow |
$370 |
$258 |
43.4% |
$272 |
$225 |
20.8% |
Free cash flow is a Fool's best friend.
Competitive Context
Market Cap |
Trailing P/E Ratio |
CAPS Rating |
|
---|---|---|---|
Microsoft |
$323,560 |
22.7 |
*** |
Apple |
$160,780 |
46.7 |
**** |
Adobe |
$24,150 |
37.2 |
***** |
Autodesk |
$11,480 |
33.9 |
**** |
Avid Technology |
$1,040 |
N/A |
* |
Keep your partners close and the competition in your vest pocket.
Related Foolishness:
Help us in our goal to give every young person around the globe a financial education. Learn more about the new direction of Foolanthropy, now in its second decade, here.