On Oct. 18, computer and music-player builder Apple Computer (NASDAQ:AAPL) released full-year earnings for the 2006 fiscal period ending Sept. 6, 2006.

  • Apple kept gross margins stable while adding costs more slowly than revenues, and the net result is a nice uptick in operational and net profit margins.
  • Considering how often we wonder what Google (NASDAQ:GOOG) is going to do with all its cash, Apple's similarly sized stash of moolah has gone rather unnoticed. Is this company gearing up for acquisitions, hefty dividends, or maybe the occasional stock repurchase?
  • The hefty inventory growth is largely a result of 41 new Apple retail stores opened during the year, with all the shelf-filling that entails. The rest comes from building up some inventory to ship out for the coming holiday season.
  • Shareholders have plenty of reasons to smile about these results.

(Figures in millions, except per-share data)

Income Statement Highlights

Avg. Est.

FY 2006

FY 2005

Change

Sales

$19,140

$19,315.0

$13,931.0

38.6%

Net Profit

--

$1,993.0

$1,335.0

49.3%

EPS

$2.16

$2.27

$1.56

45.5%

Diluted Shares

877.5

856.8

2.4%

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

Margin Checkup

FY 2006

FY 2005

Change*

Gross Margin

28.98%

29.02%

(0.04)

Operating Margin

12.71%

11.84%

0.87

Net Margin

10.32%

9.58%

0.74
*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

FY 2006

FY 2005

Change

Cash + ST Invest.

$10,110

$8,261

22.4%

Accounts Rec.

$1,252

$895

39.9%

Inventory

$270

$165

63.6%

Liabilities

FY 2006

FY 2005

Change

Accounts Payable

$3,390

$1,779

90.6%

Long-Term Debt

$0

$0

N/A


Learn the ways of the balance sheet.

Cash Flow Highlights
Apple had better things to do than provide cash flow data, such as finishing up its options accounting review. Oh well.

Find out why Fools always follow the money.

Related Companies

  • Dell (NASDAQ:DELL)
  • SanDisk (NASDAQ:SNDK)
  • Creative (NASDAQ:CREAF)
  • Intel (NASDAQ:INTC)
  • RealNetworks
  • Napster (NASDAQ:NAPS)

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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.

At the time of publication, Fool contributor Anders Bylund had no position in any company discussed, but he does own an MP3 player by Creative, currently blasting some Scandinavian jazz-techno. Fool rules are here.