EarthLink Holdings (EarthLink Holdings) Operating Income : $45.0 Mil (TTM As of Dec. 2016)

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What is EarthLink Holdings Operating Income?

EarthLink Holdings's Operating Income for the three months ended in Dec. 2016 was $3.8 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Dec. 2016 was $45.0 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. EarthLink Holdings's Operating Income for the three months ended in Dec. 2016 was $3.8 Mil. EarthLink Holdings's Revenue for the three months ended in Dec. 2016 was $230.1 Mil. Therefore, EarthLink Holdings's Operating Margin % for the quarter that ended in Dec. 2016 was 1.64%.

EarthLink Holdings's 5-Year average Growth Rate for Operating Margin % was 0.00% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. EarthLink Holdings's annualized ROC % for the quarter that ended in Dec. 2016 was 2.48%. EarthLink Holdings's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2016 was 9.80%.

EarthLink Holdings Operating Income Historical Data

The historical data trend for EarthLink Holdings's Operating Income can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

EarthLink Holdings Operating Income Chart

EarthLink Holdings Annual Data

Trend

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

Dec13

Dec14

Dec15

Dec16

Operating Income

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72.02

-264.95

-20.85

20.23

44.98

EarthLink Holdings Quarterly Data
	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14	Mar15	Jun15	Sep15	Dec15	Mar16	Jun16	Sep16	Dec16
Operating Income	Get a 7-Day Free Trial															-1.18	14.43	15.65	11.12	3.78

EarthLink Holdings Operating Income Calculation

Operating Income, is the profit a company earned through operations. All expenses, including cash expenses such as cost of goods sold (COGS), research & development, wages, and non-cash expenses, such as depreciation, depletion and amortization, have been deducted from the sales.

Operating Income for the trailing twelve months (TTM) ended in Dec. 2016 adds up the quarterly data reported by the company within the most recent 12 months, which was $45.0 Mil.

EarthLink Holdings (NAS:ELNK) Operating Income Explanation

1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

EarthLink Holdings's annualized ROC % for the quarter that ended in Dec. 2016 is calculated as:

	ROC % (Q: Dec. 2016 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2016 )	+	Invested Capital (Q: Dec. 2016 ))	/ count )
=	15.136 * ( 1 - 10.54% )	/	( (547.61	+	544.309)	/ 2 )
=	13.5406656	/	545.9595
=	2.48 %

where

	Invested Capital		(Q: Sep. 2016 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	643.64	-	91.518	-	( 58.977	-	max(0, 148.937	-	153.449	+	58.977	))
=	547.61

	Invested Capital		(Q: Dec. 2016 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	635.646	-	88.977	-	( 51.529	-	max(0, 148.633	-	150.993	+	51.529	))
=	544.309

Note: The Operating Income data used here is four times the quarterly (Dec. 2016) data.

2. Joel Greenblatt's definition of Return on Capital:

EarthLink Holdings's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2016 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Dec. 2016 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Sep. 2016		Q: Dec. 2016
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	32.56	/	( ( (333.507 + max(-50.064, 0))	+	(331.119 + max(-44.725, 0)) )	/	2 )
=	32.56	/	( ( 333.507	+	331.119 )	/	2 )
=	32.56	/	332.313
=	9.80 %

where Working Capital is:

	Working Capital		(Q: Sep. 2016 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(70.92	+	0	+	23.552)	-	(91.518	+	37.122	+	15.896)
=	-50.064

	Working Capital		(Q: Dec. 2016 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(76.765	+	0	+	22.699)	-	(88.977	+	37.051	+	18.161)
=	-44.725

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Dec. 2016) EBIT data.

3. Operating Income is also linked to Operating Margin %:

EarthLink Holdings's Operating Margin % for the quarter that ended in Dec. 2016 is calculated as:

Operating Margin %	=	Operating Income (Q: Dec. 2016 )	/	Revenue (Q: Dec. 2016 )
	=	3.784	/	230.13
	=	1.64 %

4. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Operating Income growth rate using Operating Income per share data.

Be Aware

Compared with a company's EBITDA margin, Operating Margin can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin may decline. Often the Operating Margin declines well before the company's revenue or even profit decline. Therefore, Operating Margin is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia's Operating Margin had already been in decline since 2002, although its earnings per share were still rising. Investors who paid attention to Operating Margin would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.

EarthLink Holdings Operating Income Related Terms

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EarthLink Holdings (EarthLink Holdings) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Telecommunication Services » EarthLink Holdings Corp (NAS:ELNK) » Definitions » Operating Income

Comparable Companies

Traded in Other Exchanges

N/A

Address

Website

http://www.earthlink.net

EarthLink Holdings Corp was incorporated on December 3, 2013 as a Delaware corporation in connection with the Holding Company Reorganization. On December 31, 2013, through the creation of a new holding company structure, EarthLink, Inc. merged with EarthLink, LLC, which became a wholly-owned subsidiary of a new publicly traded parent company, EarthLink Holdings Corp. The Company together with its subsidiaries provides managed network, security and cloud services to business and residential customers in the United States. It also offers data, voice and managed network services to retail and wholesale business customers; and provides Internet access and related value-added services to residential customers. The Company operates a network including more than 29,000 route miles of fiber and 90 metro fiber rings that provide data and voice IP service coverage across more than 90 percent of the United States. The Company operates four segments aligned around distinct customer categories including Enterprise/Mid-Market, Small Business, Carrier/Transport and Consumer. The Company's Enterprise/Mid-Market segment provides data, voice and managed network services to distributed multi-site business customers; Small Business segment provides data, voice and managed network services to small, often single-site business customers; Carrier/Transport segment provides transmission capacity and other data, voice and managed network services to telecommunications carriers and large enterprises; and Consumer Services segment provides nationwide Internet access and related value-added services to residential customers. The Company faces competition from competitors including AT&T, CenturyLink, Verizon, XO and Zayo. It also faces competition from ILECs, CLECs, cable service providers and wireless and satellite service providers. The Company's communications services are subject to varying degrees of federal, state and local regulation.

Executives

Walter Turek	director	911 PANORAMA TRAIL S, ROCHESTER NY 14625
R. Gerard Salemme	director	815 CONNECTICUT AVE., SUITE 610, WASHINGTON DC 20036
Kathy S Lane	director	C/O GILLETTE COMPANY, PRUDENTIAL TOWER BUILDING, BOSTON MA 02199
Julie Ann Shimer	director	18453 LAS CUMBRES ROAD, LOS GATOS CA 95033
Gerard Brossard	officer: EVP, Enterprise & Mid-Market	1170 PEACHTREE STREET, ATLANTA GA 30309
Valerie C Benjamin	officer: SVP, Human Resources	1375 PEACHTREE STREET, ATLANTA GA 30309
Susan D Bowick	director	C/O HEWLETT-PACKARD CO, 3000 HANOVER STREET, PALO ALTO CA 94304
Joseph F Eazor	director, officer: Chief Executive Officer	1170 PEACHTREE STREET, SUITE 900, ATLANTA GA 30309
Marc F Stoll	director	C/O ARISTA NETWORKS, INC., 5453 GREAT AMERICA PARKWAY, SANTA CLARA CA 95054
Manuel W Wisehart	director	909 5TH AVE., UNIT 2101, SEATTLE WA 98164
S Marce Fuller	director	MIRANT CORPORATION, 1155 PERIMETER CENTER WEST, ATLANTA GA 30338
Thomas E Wheeler	director	1250 CONNECTICUT AVE NW, CELLULAR TELECOMMUNICATIONS& INTERNET, WASHINGTON DC 20036
Barbara Dondiego	officer: SVP Chief Marketing Officer	1375 PEACHTREE STREET ATLANTA GA 30309
Nathaniel A Davis	director	1500 ECKINGTON PLACE NE, WASHINGTON DC 20002
Terrell B Jones	director