On April 24 2006, Sun Microsystems
- Sales earnings came up short of Street expectations, but the company delivered on per-stub earnings expectations, according to Capital IQ, a division of Standard & Poor's.
- It may not get better soon. In Q2, management said it had underestimated demand for its servers and, as a result, inventory spiked by 28% year over year. The plan was to see the backlog relieved by the end of Q3 or Q4, but Sun's inventory build on a percentage basis has accelerated over the past three months, up another 48% year over year. Ouch.
- Scott McNealy, a Sun founder and CEO for 22 years, has stepped down, but will remain as chairman of the board. Company president Jonathan Schwartz will assume the top job.
(Figures in millions, except per-share data)
Income Statement Highlights
|
Avg. Est. |
Q3 2006 |
Q3 2005 |
% Change |
|
|---|---|---|---|---|
|
Sales |
$3,199 |
$3,177 |
$2,627 |
20.9 |
|
Net Profit |
-- |
($217) |
($28) |
N/A |
|
EPS |
($0.07) |
($0.06) |
($0.01) |
N/A |
Get back to basics with a look at the income statement.
Margin Checkup
|
Q3 2006 |
Q3 2005 |
% Change |
|
|---|---|---|---|
|
Gross Margin |
43.03% |
41.38% |
1.65 |
|
Op. Margin |
(6.67%) |
(5.41%) |
(1.27) |
|
Net Margin |
(6.83%) |
(1.07%) |
(5.76) |
Margins are the earnings engine. See how they work.
Balance Sheet Highlights
|
Assets |
Q3 2006 |
Q3 2005 |
% Change |
|---|---|---|---|
|
Cash+ ST Invest. |
$2,872 |
$3,135 |
(8.4) |
|
Inventory |
$574 |
$388 |
47.9 |
|
Accounts Rec. |
$2,301 |
$2,020 |
13.9 |
|
Liabilities |
Q3 2006 |
Q3 2005 |
% Change |
|---|---|---|---|
|
Total Debt |
$1,090 |
$1,116 |
(2.3) |
|
Accounts Pay. |
$1,315 |
$1,071 |
22.8 |
Learn the ways of the balance sheet.
Cash Flow Checkup*
|
Q3 2006 |
Q3 2005 |
% Change |
|
|---|---|---|---|
|
Cash From Ops |
$230 |
$174 |
32.2 |
|
Capital Expend. |
$246 |
$267 |
(7.9) |
|
Free Cash Flow |
($16) |
($93) |
N/A |
Find out why Fools always follow the money.
Related Companies:
-
Apple
(NASDAQ:AAPL) -
Dell
(NASDAQ:DELL) -
EMC
(NYSE:EMC) -
Hewlett-Packard
(NYSE:HPQ) -
IBM
(NYSE:IBM) -
Microsoft
(NASDAQ:MSFT)
Related Foolishness:
- The numbers weren't any better in Q2.
- In fact, there were good reasons to avert your portfolio's eyes.
- Sun, like AMD, wants to help you be green.
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.
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Fool contributor Tim Beyers didn't own shares in any of the companies mentioned in this story at the time of publication. You can find out what is in his portfolio by checking Tim's Fool profile. The Motley Fool has an ironclad disclosure policy.
