On Jan. 24, communications chip designer Broadcom (Nasdaq: BRCM) released earnings for the 2007 fiscal year, a period ended Dec. 31.
- Broadcom's profit margins deteriorated all through 2007 in a tough competitive environment -- only to jump back with a vengeance in the fourth quarter. Management credits successful launches of new Bluetooth, digital TV, and wireless networking products for the comeback.
- The balance sheet made it through this tough year fairly intact and still debt-free.
(Figures in millions, except per-share data)
Income Statement Highlights
|
FY 2007 |
FY 2006 |
Change | |
|---|---|---|---|
|
Sales |
$3,776 |
$3,668 |
3% |
|
Net Profit |
$213 |
$379 |
(43.7%) |
|
EPS |
$0.37 |
$0.64 |
(42.2%) |
|
Diluted Shares |
577.7 |
588.3 |
(1.8%) |
Get back to basics with the income statement.
Margin Checkup
|
FY 2007 |
FY 2006 |
Change* | |
|---|---|---|---|
|
Gross Margin |
51.5% |
51.1% |
0.4 |
|
Operating Margin |
2.3% |
6.6% |
(4.3) |
|
Net Margin |
5.7% |
10.3% |
(4.6) |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
FY 2007 |
FY 2006 |
Change |
|---|---|---|---|
|
Cash + Short-Term Investments |
$2,328 |
$2,680 |
(13.1%) |
|
Accounts Receivable |
$369 |
$383 |
(3.6%) |
|
Inventory |
$231 |
$203 |
14.1% |
|
Liabilities |
FY 2007 |
FY 2006 |
Change |
|---|---|---|---|
|
Accounts Payable |
$314 |
$308 |
1.8% |
|
Long-Term Debt |
$0 |
$0 |
N/A |
The balance sheet reflects the company's health.
Cash Flow Highlights
|
FY 2007 |
FY 2006 |
Change | |
|---|---|---|---|
|
Cash From Operations |
$832 |
$892 |
(6.7%) |
|
Capital Expenditures |
$160 |
$92 |
72.6% |
|
Free Cash Flow |
$672 |
$799 |
(15.9%) |
|
$130 |
$347 |
(62.6%) |
Free cash flow is a Fool's best friend.
Competitive Context
|
Market Cap |
Trailing P/E Ratio |
CAPS Rating | |
|---|---|---|---|
|
Intel (Nasdaq: INTC) |
$121,008 |
17.6 | |
|
Qualcomm (Nasdaq: QCOM) |
$66,460 |
20.8 | |
|
Texas Instruments (NYSE: TXN) |
$40,320 |
16.3 | |
|
Broadcom |
$12,540 |
80.2 | |
|
Infineon Technologies AG (NYSE: IFX) |
$6,920 |
N/A |
Using the latest reported numbers from Capital IQ. Keep your partners close and the competition in your vest pocket.
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