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HMN Financial Inc (NAS:HMNF)
Operating Margin
27.66% (As of Jun. 2016)

Operating margin is calculated as operating income divided by its revenue. HMN Financial Inc's operating income for the three months ended in Jun. 2016 was \$2.45 Mil. HMN Financial Inc's revenue for the three months ended in Jun. 2016 was \$8.87 Mil. Therefore, HMN Financial Inc's operating margin for the quarter that ended in Jun. 2016 was 27.66%.

HMNF' s Operating Margin Range Over the Past 10 Years
Min: -59.18   Max: 46.02
Current: 26.26

-59.18
46.02
HMNF's Operating Margin is ranked lower than
61% of the 1653 Companies
in the Global Savings & Cooperative Banks industry.

( Industry Median: 30.84 vs. HMNF: 26.26 )

HMN Financial Inc's 5-Year Average operating margin Growth Rate was 0.00% per year.

HMN Financial Inc's operating income for the three months ended in Jun. 2016 was \$2.45 Mil. Its operating income for the trailing twelve months (TTM) ended in Jun. 2016 was \$8.32 Mil.

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.

HMN Financial Inc'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 ) = 4.567 / 27.599 = 16.55 %

HMN Financial Inc's Operating Margin for the quarter that ended in Jun. 2016 is calculated as

 Operating Margin = Operating Income (Q: Jun. 2016 ) / Revenue (Q: Jun. 2016 ) = 2.452 / 8.866 = 27.66 %

* 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

Historical Data

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

HMN Financial Inc Annual Data

 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Operating Margin 30.26 40.12 -37.02 -39.07 -59.18 -32.76 16.69 45.41 46.02 16.55

HMN Financial Inc Quarterly Data

 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Operating Margin 39.73 64.48 36.88 44.17 11.72 14.19 18.15 20.92 37.28 27.66
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