On Jan. 15, Intel (Nasdaq: INTC) released earnings for the 2007 fiscal year, the period ending Dec. 29.

  • Don't read too much into the impressive-looking profit growth and margin expansions. After all, 2006 was a disastrous year for Intel, and makes for easy year-over-year comparisons.
  • Even in lean years, the company remains a cash-minting machine, with an ironclad balance sheet to match. Management is mum on what it intends to do with its lavish loot, though.
  • Intel spent $2.75 billion on share buybacks in 2007; more than half of it in the fourth quarter. That still wasn't enough to cancel out the dilution from employees converting their bonus options.

(Figures in millions, except per-share data.)

Income Statement Highlights

FY 2007

FY 2006

Change

Sales

$38,334

$35,382

8.3%

Net Profit

$6,976

$5,044

38.3%

EPS

$1.18

$0.86

37.2%

Diluted Shares

5,936

5,880

1.0%

Get back to basics with the income statement.

Margin Checkup

FY 2007

FY 2006

Change*

Gross Margin

51.9%

51.5%

0.4

Operating Margin

21.4%

17.5%

3.9

Net Margin

18.2%

14.3%

3.9

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

FY 2007

FY 2006

Change

Cash + Short-term Investments

$12,797

$8,868

44.3%

Accounts Receivable

$2,576

$2,709

(4.9%)

Inventory

$3,370

$4,314

(21.9%)

Liabilities

FY 2007

FY 2006

Change

Accounts Payable

$2,361

$2,256

4.7%

Long-Term Debt

$1,980

$1,848

7.1%

The balance sheet reflects the company's health.

Cash Flow Highlights

FY 2007

FY 2006

Change

Cash From Ops.

$12,000

$10,620

13.0%

Capital Expenditures

$5,000

$5,779

(13.5%)

Free Cash Flow

$7,000

$4,841

44.6%

Owner Earnings

$6,774

$4,177

62.2%

Free cash flow is a Fool's best friend. Rough 2007 cash flow figures from Intel's earnings call; owner earnings calculated from reported figures.

Competitive Context

Market Cap (millions)

Trailing P/E Ratio

CAPS Rating

Intel

$115,770

19.2

****

Sun Microsystems (Nasdaq: JAVA)

$12,990

22.9

***

Marvell Technology Group (Nasdaq: MRVL)

$6,200

N/A

****

Micron Technology (NYSE: MU)

$4,260

N/A

**

Advanced Micro Devices (NYSE: AMD)

$3,240

N/A

**

Using the latest reported numbers from Capital IQ.

Keep your partners close and the competition in your vest pocket.

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 an in-depth discussion of what the numbers mean.

At the time of publication, Fool contributor Anders Bylund was an AMD shareholder, but had no other position in any company mentioned. Intel is a Motley Fool Inside Value recommendation. Fool rules are here.