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Sunoco LP (NYSE:SUN)
Operating Margin
2.52% (As of Sep. 2016)

Operating margin is calculated as operating income divided by its revenue. Sunoco LP's operating income for the three months ended in Sep. 2016 was $104 Mil. Sunoco LP's revenue for the three months ended in Sep. 2016 was $4,137 Mil. Therefore, Sunoco LP's operating margin for the quarter that ended in Sep. 2016 was 2.52%.

SUN' s Operating Margin Range Over the Past 10 Years
Min: 0.3   Max: 2.55
Current: 2.55

0.3
2.55
SUN's Operating Margin is ranked lower than
58% of the 165 Companies
in the Global Oil & Gas Refining & Marketing industry.

( Industry Median: 3.17 vs. SUN: 2.55 )

Sunoco LP's 5-Year Average operating margin Growth Rate was 0.00% per year.

Sunoco LP's operating income for the three months ended in Sep. 2016 was $104 Mil. Its operating income for the trailing twelve months (TTM) ended in Sep. 2016 was $356 Mil.

Warning Sign:

Sunoco LP 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.

Sunoco LP'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 )
=318.25 / 16935.347
=1.88 %

Sunoco LP's Operating Margin for the quarter that ended in Sep. 2016 is calculated as

Operating Margin=Operating Income (Q: Sep. 2016 ) / Revenue (Q: Sep. 2016 )
=104.15 / 4137.317
=2.52 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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 local exchange's currency.

Sunoco LP Annual Data

Dec10Dec11Dec12Dec13Dec14Dec15
Operating Margin 0.000.000.000.000.550.440.540.300.001.88

Sunoco LP Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
Operating Margin 0.830.000.001.502.411.901.412.873.062.52
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