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Chicago Bridge & Iron Co NV (NYSE:CBI)
Operating Margin
7.04% (As of Mar. 2016)

Operating margin is calculated as operating income divided by its revenue. Chicago Bridge & Iron Co NV's operating income for the three months ended in Mar. 2016 was $188 Mil. Chicago Bridge & Iron Co NV's revenue for the three months ended in Mar. 2016 was $2,668 Mil. Therefore, Chicago Bridge & Iron Co NV's operating margin for the quarter that ended in Mar. 2016 was 7.04%.

CBI' s Operating Margin Range Over the Past 10 Years
Min: -3.29   Max: 8.33
Current: -3.88

-3.29
8.33
CBI's Operating Margin is ranked lower than
86% of the 989 Companies
in the Global Engineering & Construction industry.

( Industry Median: 4.71 vs. CBI: -3.88 )

Chicago Bridge & Iron Co NV's 5-Year Average operating margin Growth Rate was 0.00% per year.

Chicago Bridge & Iron Co NV's operating income for the three months ended in Mar. 2016 was $188 Mil. Its operating income for the trailing twelve months (TTM) ended in Mar. 2016 was $-484 Mil.

Warning Sign:

Chicago Bridge & Iron Co NV had operating loss over the past 3 years.


Definition

Operating margin - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.

Chicago Bridge & Iron Co NV's Operating Margin for the fiscal year that ended in Dec. 2015 is calculated as

Operating Margin=Operating Income (A: Dec. 2015 ) / Revenue (A: Dec. 2015 )
=-425.117 / 12929.504
=-3.29 %

Chicago Bridge & Iron Co NV's Operating Margin for the quarter that ended in Mar. 2016 is calculated as

Operating Margin=Operating Income (Q: Mar. 2016 ) / Revenue (Q: Mar. 2016 )
=187.94 / 2667.733
=7.04 %

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

Just like Gross Margin, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.


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.


Related Terms

Gross Margin, Operating Income, Revenue, Cost of Goods Sold, Selling, General, & Admin. Expense (SGA), Research & Development, Depreciation, Depletion and Amortization


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Chicago Bridge & Iron Co NV Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Operating Margin 4.664.710.596.908.337.818.316.177.57-3.29

Chicago Bridge & Iron Co NV Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
Operating Margin 7.015.557.908.468.127.908.86-26.79-2.027.04
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