Mead Johnson Nutrition Co (Mead Johnson Nutrition Co) Operating Income : $824 Mil (TTM As of Mar. 2017)

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What is Mead Johnson Nutrition Co Operating Income?

Mead Johnson Nutrition Co's Operating Income for the three months ended in Mar. 2017 was $155 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Mar. 2017 was $824 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Mead Johnson Nutrition Co's Operating Income for the three months ended in Mar. 2017 was $155 Mil. Mead Johnson Nutrition Co's Revenue for the three months ended in Mar. 2017 was $884 Mil. Therefore, Mead Johnson Nutrition Co's Operating Margin % for the quarter that ended in Mar. 2017 was 17.56%.

Mead Johnson Nutrition Co'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. Mead Johnson Nutrition Co's annualized ROC % for the quarter that ended in Mar. 2017 was 40.39%. Mead Johnson Nutrition Co's annualized ROC (Joel Greenblatt) % for the quarter that ended in Mar. 2017 was 66.44%.

Mead Johnson Nutrition Co Operating Income Historical Data

The historical data trend for Mead Johnson Nutrition Co'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.

Mead Johnson Nutrition Co Operating Income Chart

Mead Johnson Nutrition Co Annual Data

Trend

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

Dec13

Dec14

Dec15

Dec16

Operating Income

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835.30

974.90

988.30

936.20

818.70

Mead Johnson Nutrition Co Quarterly Data
	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14	Mar15	Jun15	Sep15	Dec15	Mar16	Jun16	Sep16	Dec16	Mar17
Operating Income	Get a 7-Day Free Trial															150.10	214.40	228.20	226.00	155.10

Mead Johnson Nutrition Co 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 Mar. 2017 adds up the quarterly data reported by the company within the most recent 12 months, which was $824 Mil.

Mead Johnson Nutrition Co (NYSE:MJN) Operating Income Explanation

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

Mead Johnson Nutrition Co's annualized ROC % for the quarter that ended in Mar. 2017 is calculated as:

	ROC % (Q: Mar. 2017 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2016 )	+	Invested Capital (Q: Mar. 2017 ))	/ count )
=	620.4 * ( 1 - 8.13% )	/	( (1397.4	+	1425.2)	/ 2 )
=	569.96148	/	1411.3
=	40.39 %

where

	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	))
=	4087.7	-	1227.9	-	( 1795.4	-	max(0, 1244.2	-	2706.6	+	1795.4	))
=	1397.4

	Invested Capital		(Q: Mar. 2017 )
=	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	))
=	4227.1	-	1293.4	-	( 1724.4	-	max(0, 1308.8	-	2817.3	+	1724.4	))
=	1425.2

Note: The Operating Income data used here is four times the quarterly (Mar. 2017) data.

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

Mead Johnson Nutrition Co's annualized ROC (Joel Greenblatt) % for the quarter that ended in Mar. 2017 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Mar. 2017 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Dec. 2016		Q: Mar. 2017
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	635.2	/	( ( (948.6 + max(-385.8, 0))	+	(963.6 + max(-592.5, 0)) )	/	2 )
=	635.2	/	( ( 948.6	+	963.6 )	/	2 )
=	635.2	/	956.1
=	66.44 %

where Working Capital is:

	Working Capital		(Q: Dec. 2016 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(320.6	+	473.5	+	60.4)	-	(1227.9	+	12.4	+	-2.2737367544323E-13)
=	-385.8

	Working Capital		(Q: Mar. 2017 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(0	+	498.5	+	213.3)	-	(1293.4	+	10.9	+	-2.2737367544323E-13)
=	-592.5

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Mar. 2017) EBIT data.

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

Mead Johnson Nutrition Co's Operating Margin % for the quarter that ended in Mar. 2017 is calculated as:

Operating Margin %	=	Operating Income (Q: Mar. 2017 )	/	Revenue (Q: Mar. 2017 )
	=	155.1	/	883.5
	=	17.56 %

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.

Mead Johnson Nutrition Co Operating Income Related Terms

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Mead Johnson Nutrition Co (Mead Johnson Nutrition Co) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » Mead Johnson Nutrition Co (NYSE:MJN) » Definitions » Operating Income

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Address

Website

http://www.meadjohnson.com

Mead Johnson Nutrition makes, distributes, and markets pediatric nutrition products worldwide under a variety of brands, including Enfamil, its largest label, along with Sustagen, Enfagrow, and Nutramigen. Infant formula represented 59% of 2015 sales and children's nutrition 39%, with expectant and nursing mother nutrition and pediatric vitamins comprising the remainder. The company sells its products globally; 73% of sales were generated outside the United States in 2015. At about 30% of revenue, China is the company's largest market.

Executives

Kimberly A Casiano	director	C/O FORD MOTOR COMPANY, ONE AMERICAN ROAD, DEARBORN MI 48126
James E. Shiah	officer: SVP and Controller	2 PARK AVENUE, NEW YORK NY 10016
Howard B Bernick	director	1100 N WOOD DALE RD, WOOD DALE IL 60191
Michael A. Sherman	director	3000 KENT AVE STE A1-100, WEST LAFAYETTE IN 47906
Robert S Singer	director	6301 FITCH PATH, NEW ALBANY OH 43054
Celeste A. Clark	director	C/O ADVANCEPIERRE FOODS HOLDINGS, INC., 9987 CARVER ROAD, BLUE ASH OH 45242
Peter Gervis Ratcliffe	director
Steven Altschuler	director	MEAD JOHNSON NUTRITION COMPANY, 2701 PATRIOT BLVD, GLENVIEW IL 60026
Patrick M Sheller	officer: SVP, Gen. Counsel & Secretary	343 STATE STREET, ROCHESTER NY 14650
Elliot Sigal	director
James M Cornelius	director
Michael Grobstein	director	C/O GUIDANT CORP, 111 MONUMENT CIRCLE #2900, INDIANAPOLIS IN 46204-5129
Anna C Catalano	director	1313 NORTH MARKET STREET, WILMINGTON DE 19894
Peter G Leemputte	officer: EVP and CFO	CHICAGO TITLE CORP, 171 N CLARK ST, CHICAGO IL 80601
Lynn H Clark	officer: Sr. VP, Human Resources	2400 WEST LLOYD EXPRESSWAY, EVANSVILLE IL 47721