Asiainfo-Linkage, (FRA:AFB) Operating Income : €-195.9 Mil (TTM As of Sep. 2013)

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What is Asiainfo-Linkage, Operating Income?

Asiainfo-Linkage,'s Operating Income for the three months ended in Sep. 2013 was €5.2 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Sep. 2013 was €-195.9 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Asiainfo-Linkage,'s Operating Income for the three months ended in Sep. 2013 was €5.2 Mil. Asiainfo-Linkage,'s Revenue for the three months ended in Sep. 2013 was €107.1 Mil. Therefore, Asiainfo-Linkage,'s Operating Margin % for the quarter that ended in Sep. 2013 was 4.82%.

Asiainfo-Linkage,'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. Asiainfo-Linkage,'s annualized ROC % for the quarter that ended in Sep. 2013 was 4.00%. Asiainfo-Linkage,'s annualized ROC (Joel Greenblatt) % for the quarter that ended in Sep. 2013 was 13.68%.

Asiainfo-Linkage, Operating Income Historical Data

The historical data trend for Asiainfo-Linkage,'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.

Asiainfo-Linkage, Operating Income Chart

Asiainfo-Linkage, Annual Data

Trend

Dec03

Dec04

Dec05

Dec06

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

Operating Income

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14.28

23.86

45.44

42.24

16.56

Asiainfo-Linkage, Quarterly Data
	Dec08	Mar09	Jun09	Sep09	Dec09	Mar10	Jun10	Sep10	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13
Operating Income	Get a 7-Day Free Trial															1.71	11.47	2.27	-214.77	5.16

Asiainfo-Linkage, 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. 2013 adds up the quarterly data reported by the company within the most recent 12 months, which was €-195.9 Mil.

Asiainfo-Linkage, (FRA:AFB) Operating Income Explanation

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

Asiainfo-Linkage,'s annualized ROC % for the quarter that ended in Sep. 2013 is calculated as:

	ROC % (Q: Sep. 2013 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2013 )	+	Invested Capital (Q: Sep. 2013 ))	/ count )
=	20.648 * ( 1 - 24.95% )	/	( (399.585	+	375.859)	/ 2 )
=	15.496324	/	387.722
=	4.00 %

where

	Invested Capital		(Q: Jun. 2013 )
=	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	))
=	780.546	-	159.637	-	( 221.324	-	max(0, 189.436	-	554.845	+	221.324	))
=	399.585

	Invested Capital		(Q: Sep. 2013 )
=	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	))
=	772.463	-	156.36	-	( 240.244	-	max(0, 179.551	-	550.333	+	240.244	))
=	375.859

Note: The Operating Income data used here is four times the quarterly (Sep. 2013) data.

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

Asiainfo-Linkage,'s annualized ROC (Joel Greenblatt) % for the quarter that ended in Sep. 2013 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Sep. 2013 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Jun. 2013		Q: Sep. 2013
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	20.648	/	( ( (18.765 + max(137.441, 0))	+	(22.839 + max(122.785, 0)) )	/	2 )
=	20.648	/	( ( 156.206	+	145.624 )	/	2 )
=	20.648	/	150.915
=	13.68 %

where Working Capital is:

	Working Capital		(Q: Jun. 2013 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(259.131	+	23.953	+	43.793)	-	(159.637	+	29.799	+	0)
=	137.441

	Working Capital		(Q: Sep. 2013 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(242.514	+	18.155	+	41.667)	-	(156.36	+	23.191	+	-2.8421709430404E-14)
=	122.785

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Sep. 2013) EBIT data.

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

Asiainfo-Linkage,'s Operating Margin % for the quarter that ended in Sep. 2013 is calculated as:

Operating Margin %	=	Operating Income (Q: Sep. 2013 )	/	Revenue (Q: Sep. 2013 )
	=	5.162	/	107.106
	=	4.82 %

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.

Asiainfo-Linkage, Operating Income Related Terms

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

Asiainfo-Linkage, (FRA:AFB) Business Description

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http://www.asiainfo-linkage.com

Asiainfo-Linkage, Inc, a Delaware corporation, commenced operations in the United States in 1993. The Company is a provider of telecommunications software solutions and information technology, or IT, related services in China. It also provides variety of services including business operational consulting service, IT architecture planning service, system integration services based on its own products and other third party software and hardware, change of request implementation, maintenance on customer premise and management services. The Company's suite of innovative solutions includes business and operation support systems, network infrastructure solutions, and service application solutions. The products and services it offers to the telecommunications industry include various software product suites, most of which are designed with open architecture to facilitate further development and customization for specific purposes. The Company's core BSS/OSS offering primarily includes convergent billing solutions, CRM and BI systems. It also provides software enhancement and maintenance services for the systems it develop, as well as system integration and other value-added IT consulting and planning services. Its OSS Package is a highly comprehensive and intelligent service fulfilment framework based on OSS fulfilment domain definition in eTOM model and OSS specifications of telecom operators. In OSS Package, process analysis methodology and project implementation methodology enables a rapid implementation of telecom service fulfilment system. It provides process analysis methodology, project implementation methodology, inventory data model, interface integration framework and built-in inventory management templates. Its network management solutions include network access and backbone infrastructure planning, design and implementation for telecommunications and Internet service providers. These services include technical training for its customers, as well as professional maintenance and support services. The Company designs and provides a series of service applications that enable telecommunications operators and service providers to offer value-added services, such as Short Message Service, or SMS, mobile email, mobile entertainment and mobile e-commerce. These applications often involve licensed third-party software that it's customizes or integrate with its proprietary software to provide individualized solutions. The Company's software and services enable its customers to build, maintain, operate, manage and improve their communications infrastructure. Its largest customers are the major telecommunications carriers in China and their provincial subsidiaries, including China Mobile Communications Corporation, or China Mobile, China United Telecommunications Corporation, or China Unicom, and China Telecommunications Corporation, or China Telecom. The Company relies on its own sales force to market and sell its products and services