RadioShack (FRA:TAN) Operating Income : €-251 Mil (TTM As of Dec. 2013)

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What is RadioShack Operating Income?

RadioShack's Operating Income for the six months ended in Dec. 2013 was €-251 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Dec. 2013 was €-251 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. RadioShack's Operating Income for the six months ended in Dec. 2013 was €-251 Mil. RadioShack's Revenue for the six months ended in Dec. 2013 was €2,507 Mil. Therefore, RadioShack's Operating Margin % for the quarter that ended in Dec. 2013 was -10.02%.

RadioShack'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. RadioShack's annualized ROC % for the quarter that ended in Dec. 2013 was -31.45%. RadioShack's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2013 was -59.38%.

RadioShack Operating Income Historical Data

The historical data trend for RadioShack'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.

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RadioShack Operating Income Chart

RadioShack Annual Data

Trend

Dec04

Dec05

Dec06

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

Dec13

Operating Income

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253.41

264.75

117.88

-19.05

-251.12

RadioShack Semi-Annual Data
	Dec95	Dec96	Dec97	Dec98	Dec99	Dec00	Dec01	Dec02	Dec03	Dec04	Dec05	Dec06	Dec07	Dec08	Dec09	Dec10	Dec11	Dec12	Dec13
Operating Income	Get a 7-Day Free Trial														253.41	264.75	117.88	-19.05	-251.12

RadioShack 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.

For stock reported annually, GuruFocus uses latest annual data as the TTM data. Operating Income for the trailing twelve months (TTM) ended in Dec. 2013 was €-251 Mil.

RadioShack (FRA:TAN) Operating Income Explanation

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

RadioShack's annualized ROC % for the quarter that ended in Dec. 2013 is calculated as:

	ROC % (Q: Dec. 2013 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2012 )	+	Invested Capital (Q: Dec. 2013 ))	/ count )
=	-251.12 * ( 1 - 3.21% )	/	( (881.177	+	664.592)	/ 2 )
=	-243.059048	/	772.8845
=	-31.45 %

where

	Invested Capital		(Q: Dec. 2012 )
=	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	))
=	1751.914	-	462.534	-	( 408.203	-	max(0, 745.388	-	1510.208	+	408.203	))
=	881.177

	Invested Capital		(Q: Dec. 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	))
=	1161.576	-	365.73	-	( 131.254	-	max(0, 426.758	-	973.09	+	131.254	))
=	664.592

Note: The Operating Income data used here is one times the annual (Dec. 2013) data.

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

RadioShack's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2013 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Dec. 2013 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Dec. 2012		Q: Dec. 2013
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	-257.471	/	( ( (182.118 + max(261.29, 0))	+	(136.656 + max(287.182, 0)) )	/	2 )
=	-257.471	/	( ( 443.408	+	423.838 )	/	2 )
=	-257.471	/	433.623
=	-59.38 %

where Working Capital is:

	Working Capital		(Q: Dec. 2012 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(37.109	+	692.125	+	65.075)	-	(462.534	+	16.688	+	53.797)
=	261.29

	Working Capital		(Q: Dec. 2013 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(25.988	+	585.679	+	101.47)	-	(365.73	+	17.082	+	43.143)
=	287.182

When net working capital is negative, 0 is used.

Note: The EBIT data used here is one times the annual (Dec. 2013) EBIT data.

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

RadioShack's Operating Margin % for the quarter that ended in Dec. 2013 is calculated as:

Operating Margin %	=	Operating Income (Q: Dec. 2013 )	/	Revenue (Q: Dec. 2013 )
	=	-251.12	/	2507.039
	=	-10.02 %

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.

RadioShack Operating Income Related Terms

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

RadioShack (FRA:TAN) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Retail - Cyclical » RadioShack Corp (FRA:TAN) » Definitions » Operating Income

Comparable Companies

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Address

Website

http://www.radioshack.com

RS Legacy Corp, formerlyÂ RadioShack Corp was incorporated in 1967. The Company, along with its subsidiaries, is primarily engaged in the retail sale of consumer electronics goods and services through its RadioShack store chain. At December 31, 2013, it operated 4,297 U.S. company-operated stores under the RadioShack brand located throughout the United States, as well as in Puerto Rico and the U.S. Virgin Islands. These stores are located in strip centers and shopping malls, as well as individual storefronts. Each location carries a broad assortment of both name brand and private brand consumer electronics products. The Company's product lines are categorized into two platforms; namely mobility and retail. Its mobility platform includes postpaid and prepaid wireless handsets, commissions, residual income, prepaid wireless airtime, tablet devices, and e-readers. The retail platform includes remaining consumer electronics product categories and related accessories; batteries and power products; and technical products. The Company has other sales channels and support operations such as: Dealer Outlets, RadioShack de Mexico, RadioShack.com, Distribution Centers, RadioShack Technology Services and RadioShack Global Sourcing. The Company owns or is licensed to use many trademarks and service marks related to its RadioShack stores in the United States and in foreign countries. Its private brand manufactured products are sold under the RadioShack, AUVIO, Enercell and Gigaware trademark. It also owns patents and patent applications relating to consumer electronics products. The Company competes in the sale of its products and services with several retail formats, including national, regional, and independent consumer electronics retailers. It competes with department and specialty retail stores in certain product categories. It competes with wireless providers in mobility platform through their own retail and online presence. It also competes with big-box retailers, discount and warehouse retailers, and Internet retailers. The Company is subject to foreign, federal, state, and local laws and regulations including, but not limited to, the Fair Labor Standards Act and ERISA, each as amended, and regulations promulgated by the Federal Trade Commission, SEC, Internal Revenue Service, Department of Labor, Occupational Safety and Health Administration, and Environmental Protection Agency.