AVANIR Pharmaceuticals (FRA:AV2B) Operating Income : €-34.40 Mil (TTM As of Sep. 2014)

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What is AVANIR Pharmaceuticals Operating Income?

AVANIR Pharmaceuticals's Operating Income for the three months ended in Sep. 2014 was €-9.84 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Sep. 2014 was €-34.40 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. AVANIR Pharmaceuticals's Operating Income for the three months ended in Sep. 2014 was €-9.84 Mil. AVANIR Pharmaceuticals's Revenue for the three months ended in Sep. 2014 was €25.38 Mil. Therefore, AVANIR Pharmaceuticals's Operating Margin % for the quarter that ended in Sep. 2014 was -38.77%.

Warning Sign:

AVANIR Pharmaceuticals operating margin has been in 5-year decline. The average rate of decline per year is -45.3%.

AVANIR Pharmaceuticals's 5-Year average Growth Rate for Operating Margin % was -45.30% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. AVANIR Pharmaceuticals's annualized ROC % for the quarter that ended in Sep. 2014 was -449.24%. AVANIR Pharmaceuticals's annualized ROC (Joel Greenblatt) % for the quarter that ended in Sep. 2014 was -1,619.38%.

AVANIR Pharmaceuticals Operating Income Historical Data

The historical data trend for AVANIR Pharmaceuticals'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.

AVANIR Pharmaceuticals Operating Income Chart

AVANIR Pharmaceuticals Annual Data

Trend

Sep05

Sep06

Sep07

Sep08

Sep09

Sep10

Sep11

Sep12

Sep13

Sep14

Operating Income

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-20.68

-44.08

-45.32

-53.43

-35.96

AVANIR Pharmaceuticals Quarterly Data
	Dec09	Mar10	Jun10	Sep10	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14
Operating Income	Get a 7-Day Free Trial															-25.81	-7.30	-8.51	-8.75	-9.84

AVANIR Pharmaceuticals 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. 2014 adds up the quarterly data reported by the company within the most recent 12 months, which was €-34.40 Mil.

AVANIR Pharmaceuticals (FRA:AV2B) Operating Income Explanation

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

AVANIR Pharmaceuticals's annualized ROC % for the quarter that ended in Sep. 2014 is calculated as:

	ROC % (Q: Sep. 2014 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2014 )	+	Invested Capital (Q: Sep. 2014 ))	/ count )
=	-39.36 * ( 1 - 0% )	/	( (12.738	+	4.785)	/ 2 )
=	-39.36	/	8.7615
=	-449.24 %

where

	Invested Capital		(Q: Jun. 2014 )
=	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	))
=	87.176	-	18.688	-	( 62.539	-	max(0, 27.119	-	82.869	+	62.539	))
=	12.738

	Invested Capital		(Q: Sep. 2014 )
=	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	))
=	238.219	-	24.904	-	( 210.971	-	max(0, 24.904	-	233.434	+	210.971	))
=	4.785

Note: The Operating Income data used here is four times the quarterly (Sep. 2014) data.

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

AVANIR Pharmaceuticals's annualized ROC (Joel Greenblatt) % for the quarter that ended in Sep. 2014 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Sep. 2014 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Jun. 2014		Q: Sep. 2014
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	-41.788	/	( ( (2.343 + max(-0.16300000000001, 0))	+	(2.818 + max(-2.441, 0)) )	/	2 )
=	-41.788	/	( ( 2.343	+	2.818 )	/	2 )
=	-41.788	/	2.5805
=	-1,619.38 %

where Working Capital is:

	Working Capital		(Q: Jun. 2014 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(15.724	+	0.505	+	2.296)	-	(18.688	+	0	+	0)
=	-0.16300000000001

	Working Capital		(Q: Sep. 2014 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(17.717	+	0.62	+	4.126)	-	(24.904	+	0	+	0)
=	-2.441

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Sep. 2014) EBIT data.

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

AVANIR Pharmaceuticals's Operating Margin % for the quarter that ended in Sep. 2014 is calculated as:

Operating Margin %	=	Operating Income (Q: Sep. 2014 )	/	Revenue (Q: Sep. 2014 )
	=	-9.84	/	25.379
	=	-38.77 %

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.

AVANIR Pharmaceuticals Operating Income Related Terms

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

AVANIR Pharmaceuticals (FRA:AV2B) Business Description

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http://www.avanir.com

Avanir Pharmaceuticals was incorporated in California in August 1988 and was reincorporated in Delaware in March 2009. The Company is a biopharmaceutical company focused on acquiring, developing and commercializing novel therapeutic products for the treatment of central nervous system disorders. The Company commenced promotion of NUEDEXTA in the United States in February 2011. The Company is also studying AVP-923 for use in different types of neuropathic pain. NUEDEXTA is the first and only FDA-approved treatment for pseudobulbar affect. NUEDEXTA is an combination of two components: dextromethorphan hydrobromide, the ingredient that is harmacologically active in the central nervous system, and quinidine sulfate, a metabolic inhibitor enabling dextromethorphan to reach therapeutic plasma concentrations. The Company currently markets NUEDEXTA to approximately 10,000 physicians and other healthcare providers who specialize in psychiatry, neurology or geriatric medicine and practice in outpatient or long-term care settings. NUEDEXTA may face competition from several products: Antidepressants, including Prozac, Celexa, Zoloft, Paxil, Elavil and Pamelor and others; Atypical antipsychotic agents, including Zyprexa, Risperdal, Seroquel, Abilify, Geodon and others; and Miscellaneous agents, including Symmetrel, Lithium and others. The Company is subject to regulation under the Occupational Safety and Health Act, the Environmental Protection Act, the Toxic Substance Control Act, the Export Control Act and other present and future laws of general application.

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