Thoratec (FRA:TL1) Operating Income : €47.4 Mil (TTM As of Jun. 2015)

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What is Thoratec Operating Income?

Thoratec's Operating Income for the three months ended in Jun. 2015 was €16.4 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Jun. 2015 was €47.4 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Thoratec's Operating Income for the three months ended in Jun. 2015 was €16.4 Mil. Thoratec's Revenue for the three months ended in Jun. 2015 was €114.7 Mil. Therefore, Thoratec's Operating Margin % for the quarter that ended in Jun. 2015 was 14.26%.

Warning Sign:

Thoratec Corp operating margin has been in 5-year decline. The average rate of decline per year is -2.1%.

Thoratec's 5-Year average Growth Rate for Operating Margin % was -2.10% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. Thoratec's annualized ROC % for the quarter that ended in Jun. 2015 was 10.81%. Thoratec's annualized ROC (Joel Greenblatt) % for the quarter that ended in Jun. 2015 was 52.52%.

Thoratec Operating Income Historical Data

The historical data trend for Thoratec'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.

Thoratec Operating Income Chart

Thoratec Annual Data

Trend

Dec05

Dec06

Dec07

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Dec10

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Dec14

Operating Income

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76.69

86.76

57.65

71.21

56.72

Thoratec Quarterly Data
	Sep10	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14	Mar15	Jun15
Operating Income	Get a 7-Day Free Trial															18.57	1.64	12.79	16.58	16.35

Thoratec 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 Jun. 2015 adds up the quarterly data reported by the company within the most recent 12 months, which was €47.4 Mil.

Thoratec (FRA:TL1) Operating Income Explanation

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

Thoratec's annualized ROC % for the quarter that ended in Jun. 2015 is calculated as:

	ROC % (Q: Jun. 2015 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2015 )	+	Invested Capital (Q: Jun. 2015 ))	/ count )
=	65.408 * ( 1 - 30.37% )	/	( (427.291	+	414.969)	/ 2 )
=	45.5435904	/	421.13
=	10.81 %

where

	Invested Capital		(Q: Mar. 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	))
=	707.326	-	57.929	-	( 222.106	-	max(0, 63.272	-	379.831	+	222.106	))
=	427.291

	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	))
=	728.109	-	69.035	-	( 244.105	-	max(0, 74.186	-	410.681	+	244.105	))
=	414.969

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

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

Thoratec's annualized ROC (Joel Greenblatt) % for the quarter that ended in Jun. 2015 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Jun. 2015 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Mar. 2015		Q: Jun. 2015
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	67.856	/	( ( (46.313 + max(86.943, 0))	+	(43.99 + max(81.178, 0)) )	/	2 )
=	67.856	/	( ( 133.256	+	125.168 )	/	2 )
=	67.856	/	129.212
=	52.52 %

where Working Capital is:

	Working Capital		(Q: Mar. 2015 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(64.873	+	60.109	+	25.233)	-	(57.929	+	0	+	5.343)
=	86.943

	Working Capital		(Q: Jun. 2015 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(72.89	+	63.135	+	19.339)	-	(69.035	+	0	+	5.151)
=	81.178

When net working capital is negative, 0 is used.

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

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

Thoratec's Operating Margin % for the quarter that ended in Jun. 2015 is calculated as:

Operating Margin %	=	Operating Income (Q: Jun. 2015 )	/	Revenue (Q: Jun. 2015 )
	=	16.352	/	114.665
	=	14.26 %

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.

Thoratec Operating Income Related Terms

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

Thoratec (FRA:TL1) Business Description

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Website

http://www.thoratec.com

Thoratec Corporation incorporated in the State of California in 1976 provides mechanical circulatory support with a product portfolio to treat the full range of clinical needs for advanced heart failure patients. It develops, manufactures and markets proprietary medical devices used for circulatory support. Following the sale of ITC in 2010, the Company has one operating segment: Cardiovascular group. This segment is organized and operates to develop and manufacture mechanical circulatory products to support the cardiovascular systems of humans. The Company's VAD products primarily serve patients suffering from late-stage HF. HF is a chronic disease that occurs when degeneration of the heart muscle reduces the pumping power of the heart, causing the heart to become too weak to pump blood at a level sufficient to meet the body's demands. Hospitals that perform open heart surgery and heart transplants are the potential customers for its Thoratec and HeartMate products. The Company estimates that it sells into 293 of these centers. According to the Company's estimates, it is in approximately 149 centers in the United States and 144 centers internationally. Competition from medical device companies and medical device divisions of healthcare companies, pharmaceutical companies and gene- and cell-based therapies is intense and is expected to increase. It therefore continues to expect new competitors both from the pharmacological and the medical device space. Among the medical device competitors are Aachen Innovative Solutions GmbH, AbioMed, Inc., Berlin Heart GmbH, HeartWare International Inc., Jarvik Heart, Inc., Maquet Cardiovascular, LLC (a division of Getinge AB), MicroMed Technology, Inc., Sun Medical Technology Research Corporation, SynCardia Systems, Inc., and Terumo Heart, Inc. All of the Company's proposed products will require regulatory approval prior to commercialization. In particular, medical devices are subject to rigorous pre-clinical testing as a condition of approval by the FDA and by similar authorities in foreign countries.

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