On July 30, electronics and component manufacturer Nam Tai Electronics (NYSE:NTE) released second-quarter earnings for the period ending June 30.
- Sales dropped 7% from last year on mobile handset weakness, but inched up 3% sequentially thanks to strong sales of LCD panels and Bluetooth headsets.
- Net income looks great, but keep in mind that $43.8 million of that take-home profit came from selling all of Nam Tai's short-term securities. Without that, there would have been a small loss instead.
- Thusly, I'd lend more weight to the operating margin change than to the bottom-line numbers. And what's up with the inflated inventory balance? Surely the new order from Leapfrog (NYSE:LF) can't account for the entire inflation there.
(Figures in millions, except per-share data.)
Income Statement Highlights
|
Q2 2007 |
Q2 2006 |
Change | |
|---|---|---|---|
|
Sales |
$197.8 |
$213.7 |
(7.4%) |
|
Net Profit |
$38.8 |
$18.5 |
109.5% |
|
EPS |
$0.87 |
$0.42 |
107.1% |
|
Diluted Shares |
44.8 |
43.7 |
2.4% |
Get back to basics with the income statement.
Margin Checkup
|
Q2 2007 |
Q2 2006 |
Change* | |
|---|---|---|---|
|
Gross Margin |
11.5% |
9.7% |
1.8 |
|
Operating Margin |
6% |
9.4% |
(3.4) |
|
Net Margin |
19.6% |
8.7% |
11.0 |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
Q2 2007 |
Q2 2006 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$268.3 |
$253.5 |
5.8% |
|
Accounts Rec. |
$101.6 |
$113.0 |
(10.1%) |
|
Inventory |
$38.8 |
$28.9 |
34.4% |
|
Liabilities |
Q2 2007 |
Q2 2006 |
Change |
|---|---|---|---|
|
Accounts Payable |
$111.2 |
$108.6 |
2.4% |
|
Long-Term Debt |
$2.0 |
$2.0 |
0% |
The balance sheet reflects the company's health.
Cash Flow Highlights
|
Q2 2007 |
Q2 2006 |
Change | |
|---|---|---|---|
|
Cash From Ops. |
$28.7 |
$17.0 |
68.8% |
|
Capital Expenditures |
$5.7 |
$3.4 |
64.7% |
|
Free Cash Flow |
$23.1 |
$13.6 |
69.8% |
|
($5.4) |
$10.7 |
N/A |
Free cash flow is a Fool's best friend.
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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, Anders Bylund had no position in any company mentioned. Fool rules are here.
