PMC-Sierra (PMC-Sierra) Operating Income : $11.5 Mil (TTM As of Sep. 2015)

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What is PMC-Sierra Operating Income?

PMC-Sierra's Operating Income for the three months ended in Sep. 2015 was $11.1 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Sep. 2015 was $11.5 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. PMC-Sierra's Operating Income for the three months ended in Sep. 2015 was $11.1 Mil. PMC-Sierra's Revenue for the three months ended in Sep. 2015 was $133.6 Mil. Therefore, PMC-Sierra's Operating Margin % for the quarter that ended in Sep. 2015 was 8.29%.

PMC-Sierra'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. PMC-Sierra's annualized ROC % for the quarter that ended in Sep. 2015 was 3.45%. PMC-Sierra's annualized ROC (Joel Greenblatt) % for the quarter that ended in Sep. 2015 was 101.41%.

PMC-Sierra Operating Income Historical Data

The historical data trend for PMC-Sierra'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.

PMC-Sierra Operating Income Chart

PMC-Sierra Annual Data

Trend

Dec05

Dec06

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Dec09

Dec10

Dec11

Dec12

Dec13

Dec14

Operating Income

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108.65

52.79

-281.22

-13.25

11.06

PMC-Sierra Quarterly Data
	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14	Mar15	Jun15	Sep15
Operating Income	Get a 7-Day Free Trial															7.50	4.80	4.86	-9.26	11.08

PMC-Sierra 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 Sep. 2015 adds up the quarterly data reported by the company within the most recent 12 months, which was $11.5 Mil.

PMC-Sierra (NAS:PMCS) Operating Income Explanation

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

PMC-Sierra's annualized ROC % for the quarter that ended in Sep. 2015 is calculated as:

	ROC % (Q: Sep. 2015 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2015 )	+	Invested Capital (Q: Sep. 2015 ))	/ count )
=	44.304 * ( 1 - 50.03% )	/	( (648.352	+	634.726)	/ 2 )
=	22.1387088	/	641.539
=	3.45 %

where

	Invested Capital		(Q: Jun. 2015 )
=	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	))
=	824.55	-	105.153	-	( 110.25	-	max(0, 154.17	-	225.215	+	110.25	))
=	648.352

	Invested Capital		(Q: Sep. 2015 )
=	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	))
=	821.504	-	88.06	-	( 115.477	-	max(0, 130.252	-	228.97	+	115.477	))
=	634.726

Note: The Operating Income data used here is four times the quarterly (Sep. 2015) data.

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

PMC-Sierra's annualized ROC (Joel Greenblatt) % for the quarter that ended in Sep. 2015 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Sep. 2015 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Jun. 2015		Q: Sep. 2015
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	44.304	/	( ( (37.413 + max(-3.759, 0))	+	(37.871 + max(12.094, 0)) )	/	2 )
=	44.304	/	( ( 37.413	+	49.965 )	/	2 )
=	44.304	/	43.689
=	101.41 %

where Working Capital is:

	Working Capital		(Q: Jun. 2015 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(58.141	+	36.165	+	19.105)	-	(105.153	+	12.017	+	-2.8421709430404E-14)
=	-3.759

	Working Capital		(Q: Sep. 2015 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(62.269	+	32.846	+	17.231)	-	(88.06	+	12.192	+	0)
=	12.094

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Sep. 2015) EBIT data.

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

PMC-Sierra's Operating Margin % for the quarter that ended in Sep. 2015 is calculated as:

Operating Margin %	=	Operating Income (Q: Sep. 2015 )	/	Revenue (Q: Sep. 2015 )
	=	11.076	/	133.574
	=	8.29 %

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.

PMC-Sierra Operating Income Related Terms

Thank you for viewing the detailed overview of PMC-Sierra's Operating Income provided by GuruFocus.com. Please click on the following links to see related term pages.

PMC-Sierra (PMC-Sierra) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Semiconductors » PMC-Sierra Inc (NAS:PMCS) » Definitions » Operating Income

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Traded in Other Exchanges

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Address

Website

http://www.pmcs.com

PMC-Sierra Inc was incorporated in the state of California in 1983 and reincorporated in the state of Delaware in 1997. The Company is a semiconductor and and software solution provider transforming networks that connect, move and store digital content. It designs, develops, markets and supports semiconductor solutions by integrating its mixed-signal, software and systems expertise through a network of offices in North America, Europe and Asia. The Company has approximately 700 different semiconductor devices that are sold to equipment and design manufacturers, who in turn supply their equipment principally to service providers, carriers and enterprises globally. The Company provides semiconductor solutions for its customers by leveraging its intellectual property, design expertise and systems knowledge across a range of applications and industry protocols. The Company derives its net revenues from the following operating segments: Communication Products, Enterprise Storage Products, Microprocessor Products, and Broadband Wireless Products. The Company operates in one reportable segment-semiconductor solutions for communications network infrastructure. Its semiconductor devices enable networking equipment primarily in the following three end market segments: Storage, Optical and Mobile networks. The Storage market segment is made up of enterprise storage equipment manufacturers and covers two broad areas: server storage, and stand-alone external storage systems. The Optical market segment refers to infrastructure suppliers of transport and access networks that use optical transport protocol and/or physical optical medium. The Mobile market segment is mainly infrastructure equipment suppliers, including base station and backhaul equipment, supporting the wireless transmission of content from and to mobile hand devices. The Company faces competition at the customer design stage when its customers are determining which semiconductor components to use in its equipment designs. The Company competes against peer-group semiconductor companies that engage in the communications and storage semiconductor business. These companies include the following: Altera Corp., Applied Micro Circuits Corp.; Broadcom Corp.; Cortina Systems, Inc.; Emulex Corp.; Exar Corp.; Infineon Technologies AG; Intel Corp.; Texas Instrument Inc; LSI Corp.; Maxim Integrated Products, Inc.; Marvell Technology Group Ltd.; Mindspeed Technologies, Inc.; QLogic Corp.; Vitesse Semiconductor; and Xilinx, Inc. The Company has a total of 597 U.S. and 80 foreign patents for circuit designs and other innovations used in the design and architecture of its products. In addition, it has 95 patent applications pending in the U.S. Patent and Trademark office. The Company's business is subject to or may be impacted by various environmental protection and social responsibility legal and customer requirements.

Executives

Alinka Flaminia	officer: VP, General Counsel Corp. Sec.	3975 FREEDOM CIRCLE, SANTA CLARA CA 95054
David M Fein	officer: VP of Worldwide Sales	1380 BORDEAUX DRIVE, SUNNYVALE CA 94089
William Kurtz	director	NOVELLUS SYSTEMS, INC., 4000 NORTH FIRST STREET, SAN JOSE CA 95134
Richard Belluzzo	director	C/O QUANTUM CORP, 501 SYCAORE DR, MILPITAS CA 95035
Gregory S Lang	director, officer: President and CEO	C/O INTEGRATED DEVICE TECHNOLOGY, INC., 6024 SILVER CREEK VALLEY ROAD, SAN JOSE CA 95138
Michael Farese	director	6290 SEQUENCE DRIVE, SAN DIEGO CA 92121
Michael Klayko	director
Richard N Nottenburg	director	1303 EAST ALGONQUIN ROAD, SCHAUMBURG IL 60196
Jonathan Judge	director	895 EMERSON STREET, PALO ALTO CA 94301
Ralph V Whitworth	10 percent owner	RELATIONAL INVESTORS LLC, 12400 HIGH BLUFF DRIVE, SUITE 600, SAN DIEGO CA 92130
Relational Investors Llc	10 percent owner	12400 HIGH BLUFF DRIVE, SUITE 600, SAN DIEGO CA 92130
Kirt P Karros	director, 10 percent owner	12400 HIGH BLUFF DR. SUITE 600, SAN DIEGO CA 92130
James Diller	other: Former Director	1001 MURPHY RANCH ROAD, MILPITAS CA 95035
Michael W Zellner	other: Former VP Finance	C/O CYAN, INC., 1383 N. MCDOWELL BLVD., SUITE 300, PETALUMA CA 94954
Frank Marshall	other: Former Director	3975 FREEDOM CIRCLE, C/O PMC SIERRA INC, SANTA CLARA CA 95054