On Oct. 30, electronics manufacturer Creative Technology (NASDAQ:CREAF) released first-quarter 2007 earnings for the period ended Sept. 30.
- Despite lower SG&A and lower R&D expenses (oh no!), Creative hasn't been able to keep cost control apace with the slower sales. The result is a grim-looking income statement and scary margins.
- On the bright side, that balance sheet looks pleasant enough. The company should be able to run at a loss for quite some time if that's what it takes to get back to profitability, without resorting to runaway debt or dilutive secondary offerings.
- Looking for that settlement payment from Apple (NASDAQ:AAPL)? The check was in the proverbial mail when the quarter closed, and Creative received the funds on Oct. 6. The company gets to add $82 million after tax, or $0.98 per share, to this quarter's net income.
(Figures in thousands, except per-share data)
Income Statement Highlights
|
Avg. Est. |
Q1 2007 |
Q1 2006 |
Change | |
|---|---|---|---|---|
|
Sales |
$269,000 |
$241,512 |
$280,173 |
(13.8%) |
|
Net Profit |
-- |
-$21,008 |
$691 |
N/A |
|
EPS |
($0.11) |
($0.25) |
$0.01 |
N/A |
|
Diluted Shares | -- |
83322 |
84690 |
(1.6%) |
Get back to basics with a look at the income statement.
Margin Checkup
|
Q1 2007 |
Q1 2006 |
Change* | |
|---|---|---|---|
|
Gross Margin |
14.86% |
20.19% |
(5.33) |
|
Operating Margin |
(23.89%) |
(3.08%) |
(20.81) |
|
Net Margin |
(8.70%) |
0.25% |
(8.95) |
Margins are the earnings engine. See how they work.
Balance Sheet Highlights
|
Assets |
Q1 2007 |
Q1 2006 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$189,845 |
$171,784 |
10.5% |
|
Accounts Rec. |
$167,185 |
$169,386 |
(1.3%) |
|
Inventory |
$269,368 |
$365,506 |
(26.3%) |
|
Liabilities |
Q1 2007 |
Q1 2006 |
Change |
|---|---|---|---|
|
Accounts Payable |
$159,799 |
$126,742 |
26.1% |
|
Long-Term Debt |
$205,585 |
$193,632 |
6.2% |
Learn the ways of the balance sheet.
Cash Flow Highlights
The company did not provide a cash flow statement. Boo!
Find out why Fools always follow the money.
Related Companies:
- Apple Computer
- SanDisk (NASDAQ:SNDK)
- Micron (NYSE:MU)
- Sony (NYSE:SNE)
- Logitech International (NASDAQ:LOGI)
- Plantronics (NYSE:PLT)
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.
To find out what more than 11,500 fellow investors think about Creative Technology - and add your voice to the mix - check out CAPS , the Fool's new community-intelligence stock-rating tool.
At the time of publication, Fool contributor Anders Bylund had positions in none of these companies. Fool rules are here .
