Group 1 Automotive (Group 1 Automotive) Operating Income

: $1,001 Mil (TTM As of Dec. 2023)

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Group 1 Automotive's Operating Income for the three months ended in Dec. 2023 was $220 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Dec. 2023 was $1,001 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Group 1 Automotive's Operating Income for the three months ended in Dec. 2023 was $220 Mil. Group 1 Automotive's Revenue for the three months ended in Dec. 2023 was $4,480 Mil. Therefore, Group 1 Automotive's Operating Margin % for the quarter that ended in Dec. 2023 was 4.91%.

Good Sign:

Group 1 Automotive Inc operating margin is expanding. Margin expansion is usually a good sign.

Group 1 Automotive's 5-Year average Growth Rate for Operating Margin % was 15.60% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. Group 1 Automotive's annualized ROC % for the quarter that ended in Dec. 2023 was 9.77%. Group 1 Automotive's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2023 was 20.34%.

Group 1 Automotive Operating Income Historical Data

The historical data trend for Group 1 Automotive'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.

Group 1 Automotive Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Operating Income

380.00

522.40

886.10

1,093.50

1,001.50

Group 1 Automotive Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Operating Income																243.20	242.70	272.50	266.40	219.80

Group 1 Automotive 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. 2023 adds up the quarterly data reported by the company within the most recent 12 months, which was $1,001 Mil.

Group 1 Automotive (NYSE:GPI) Operating Income Explanation

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

Group 1 Automotive's annualized ROC % for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	879.2 * ( 1 - 25.17% )	/	( (6551.5	+	6914.2)	/ 2 )
=	657.90536	/	6732.85
=	9.77 %

where

	Invested Capital		(Q: Sep. 2023 )
=	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	))
=	7439.6	-	835.2	-	( 52.9	-	max(0, 2174.6	-	2375.1	+	52.9	))
=	6551.5

	Invested Capital		(Q: Dec. 2023 )
=	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	))
=	7774.1	-	802.7	-	( 57.2	-	max(0, 2505.7	-	2791.3	+	57.2	))
=	6914.2

Note: The Operating Income data used here is four times the quarterly (Dec. 2023) data.

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

Group 1 Automotive's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2023 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Dec. 2023 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Sep. 2023		Q: Dec. 2023
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	778.8	/	( ( (2451.6 + max(1187.3, 0))	+	(2465.2 + max(1554.9, 0)) )	/	2 )
=	778.8	/	( ( 3638.9	+	4020.1 )	/	2 )
=	778.8	/	3829.5
=	20.34 %

where Working Capital is:

	Working Capital		(Q: Sep. 2023 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(223.5	+	1722.3	+	76.7)	-	(835.2	+	0	+	-4.5474735088646E-13)
=	1187.3

	Working Capital		(Q: Dec. 2023 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(238.3	+	1963.4	+	163.2)	-	(802.7	+	0	+	7.2999999999997)
=	1554.9

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Dec. 2023) EBIT data.

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

Group 1 Automotive's Operating Margin % for the quarter that ended in Dec. 2023 is calculated as:

Operating Margin %	=	Operating Income (Q: Dec. 2023 )	/	Revenue (Q: Dec. 2023 )
	=	219.8	/	4480
	=	4.91 %

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.

Group 1 Automotive Operating Income Related Terms

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Group 1 Automotive (Group 1 Automotive) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » Group 1 Automotive Inc (NYSE:GPI) » Definitions » Operating Income

Comparable Companies

Traded in Other Exchanges

GAV:Germany

Address

800 Gessner, Suite 500, Houston, TX, USA, 77024

Website

https://www.group1auto.com

Group 1 owns and operates 41 collision centers and 201 automotive dealerships in the U.S. and the U.K., offering 35 brands of automobiles altogether. About 150 of the stores are in the U.S. with locations mostly in metropolitan areas in 17 states in the Northeast, Southeast, Midwest, and California. Texas alone contributed 37% of new-vehicle unit volume in 2022 and the U.K. about 19%. Texas, Oklahoma, and Massachusetts combined were about 53%. Revenue in 2022 totaled $16.2 billion. The company was founded in 1995 and is based in Houston.

Executives

Daniel James Mchenry	officer: Chief Financial Officer	800 GESSNER SUITE 500, HOUSTON TX 77024
Carin Marcy Barth	director
Daryl Kenningham	officer: Regional VP, East Region	800 GESSNER, SUITE 500, HOUSTON TX 77024
Michael David Jones	officer: Sr. Vice President	800 GESSNER SUITE 500, HOUSTON TX 77024
Peter C Delongchamps	officer: VP, Manufacturer Relations	800 GESSNER, SUITE 500, HOUSTON TX 77024
Darryl M Burman	officer: Sr. VP & General Counsel	800 GESSNER, SUITE 500, HOUSTON TX 77024
Edward Mckissic	officer: Senior VP, Human Resources	800 GESSNER SUITE 500, HOUSTON TX 77024
Lincoln Pereira	director	800 GESSNER, SUITE 500, HOUSTON TX 77024
Gillian A. Hobson	officer: SVP, Chief Legal Officer & Sec	800 GESSNER RD STE 500, HOUSTON TX 77024
Earl J Hesterberg	director, officer: President & CEO	GROUP 1 AUTOMOTIVE, INC., 800 GESSNER, SUITE 500, HOUSTON TX 77024
Frank Grese	officer: Regional VP, West Region	800 GESSNER, SUITE 500, HOUSTON TX 77024
Max P Watson	director	800 GESSNER, SUITE 500, HOUSTON TX 77024
Steven Mizell	director	2000 GALLOPING HILL ROAD, KENILWORTH NJ 07033
Steven P Stanbrook	director	1525 HOWE ST, RACINE WI 53403
John C Rickel	officer: SVP & CFO	4080 JENKINS ROAD, CHATTANOOGA TN 37421