On May 2, digital-music maven RealNetworks
- Net profit included a $60.7 million litigation benefit, courtesy of Microsoft
(NASDAQ:MSFT) , compared with $39.8 million of settlement gains a year ago. This is the final quarter of Redmond payments, though, so don't count on that revenue stream going forward. - The owner earnings figure, a.k.a. structural free cash flow, backs out one-time items like that. On that count, Real still looks much better than it did a year ago.
- You'll find a clue to the company's improved performance in the fattened payables and receivables -- Real is simply doing a lot more business these days. Roughly 90% of its new subscribers signed up for wireless music services through carriers like Sprint Nextel
(NYSE:S) , Verizon(NYSE:VZ) , and Cingular.
(Figures in millions, except per-share data)
Income Statement Highlights
Q1 2007 |
Q1 2006 |
Change |
|
---|---|---|---|
Sales |
$129.5 |
$86.6 |
49.5% |
Net Profit |
$40.0 |
$24.9 |
60.6% |
EPS |
$0.22 |
$0.14 |
57.1% |
Diluted Shares |
178.1 |
176.9 |
0.6% |
Get back to basics with the income statement.
Margin Checkup
Q1 2007 |
Q1 2006 |
Change* |
|
---|---|---|---|
Gross Margin |
64.5% |
69.2% |
(4.7) |
Operating Margin |
41.5% |
36.4% |
5.1 |
Net Margin |
30.9% |
28.7% |
2.1 |
Margins are the earnings engine.
Balance Sheet Highlights
Assets |
Q1 2007 |
Q1 2006 |
Change |
---|---|---|---|
Cash + ST Invest. |
$663.4 |
$701.2 |
(5.4%) |
Accounts Rec. |
$56.0 |
$19.8 |
183.1% |
Liabilities |
Q1 2007 |
Q1 2006 |
Change |
---|---|---|---|
Accounts Payable |
$40.8 |
$12.3 |
232.6% |
Long-Term Debt |
$100.0 |
$100.0 |
0% |
The balance sheet reflects the company's health.
Cash Flow Highlights
Q1 2007 |
Q1 2006 |
Change |
|
---|---|---|---|
Cash From Ops. |
$62.1 |
($2.0) |
N/A |
Capital Expenditures |
$3.8 |
$2.6 |
49.5% |
Free Cash Flow |
$58.3 |
($4.6) |
N/A |
$12.8 |
$1.9 |
561.7% |
Free cash flow is a Fool's best friend.
Related Foolishness:
Microsoft is a Motley Fool Inside Value pick. Find out more with a free 30-day trial or two.
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 mentioned. Fool rules are here.