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A.O. Smith Operating Income

: $561 Mil (TTM As of Jun. 2021)
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A.O. Smith's Operating Income for the three months ended in Jun. 2021 was $148 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Jun. 2021 was $561 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. A.O. Smith's Operating Income for the three months ended in Jun. 2021 was $148 Mil. A.O. Smith's Revenue for the three months ended in Jun. 2021 was $860 Mil. Therefore, A.O. Smith's Operating Margin % for the quarter that ended in Jun. 2021 was 17.25%.

A.O. Smith's 5-Year average Growth Rate for Operating Margin % was -0.90% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. A.O. Smith's annualized ROC % for the quarter that ended in Jun. 2021 was 27.54%. A.O. Smith's annualized ROC (Joel Greenblatt) % for the quarter that ended in Jun. 2021 was 91.41%.


A.O. Smith Operating Income Historical Data

The historical data trend for A.O. Smith'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.

A.O. Smith Annual Data
Trend Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20
Operating Income
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 451.70 509.60 551.70 465.10 447.90

A.O. Smith Quarterly Data
Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21
Operating Income Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 91.60 137.70 152.90 122.10 148.30

A.O. Smith 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. 2021 adds up the quarterly data reported by the company within the most recent 12 months, which was $561 Mil.

* 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.


A.O. Smith  (NYSE:AOS) Operating Income Explanation

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

A.O. Smith's annualized ROC % for the quarter that ended in Jun. 2021 is calculated as:

ROC % (Q: Jun. 2021 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Mar. 2021 ) + Invested Capital (Q: Jun. 2021 ))/ count )
=593.2 * ( 1 - 21.88% )/( (1657.6 + 1707.9)/ 2 )
=463.40784/1682.75
=27.54 %

where

Note: The Operating Income data used here is four times the quarterly (Jun. 2021) data.

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

A.O. Smith's annualized ROC (Joel Greenblatt) % for the quarter that ended in Jun. 2021 is calculated as:

ROC (Joel Greenblatt) %(Q: Jun. 2021 )
=EBIT/Average of (Net fixed Assets + Net Working Capital)
=EBIT/Average of (Property, Plant and Equipment+Net Working Capital)
     Q: Mar. 2021  Q: Jun. 2021
=EBIT/( ( (Property, Plant and Equipment + Net Working Capital) + (Property, Plant and Equipment + Net Working Capital) )/ count )
=608.8/( ( (583.3 + max(63.4, 0)) + (581.7 + max(103.6, 0)) )/ 2 )
=608.8/( ( 646.7 + 685.3 )/ 2 )
=608.8/666
=91.41 %

where Working Capital is:

Working Capital(Q: Mar. 2021 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(534.5 + 312.8 + 45.4) - (783.7 + 0 + 45.6)
=63.4

Working Capital(Q: Jun. 2021 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(607 + 330.4 + 66.4) - (850.4 + 0 + 49.8)
=103.6

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Jun. 2021) EBIT data.

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

A.O. Smith's Operating Margin % for the quarter that ended in Jun. 2021 is calculated as:

Operating Margin %=Operating Income (Q: Jun. 2021 )/Revenue (Q: Jun. 2021 )
=148.3/859.8
=17.25 %

* 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.

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.


A.O. Smith Operating Income Related Terms

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


A.O. Smith Business Description

A.O. Smith logo
Industry
Industrials » Industrial Products NAICS : 335312 SIC : 3699
Traded in Other Exchanges
Address
11270 West Park Place, P. O. Box 245008, Suite 170, Milwaukee, WI, USA, 53224-9508
A.O. Smith Corporation manufactures and markets comprehensive lines of residential and commercial gas, gas tankless, and electric water heaters. Supplementary products include water heating equipment, condensing and noncondensing boilers, and water system tanks. The company's two operating segments are by geographic region: North America (majority of total revenue) and the Rest of the World. A material portion of sales in North America derive from replacing existing products, and the company utilizes a wholesale distribution channel and multiple selling locations. The Rest of the World segment sells primarily to Asian countries and operates sales offices to expand distribution and market its product portfolio.
Executives
Qiu Jack officer: SVP - Pres. A. O. Smith China A. O. SMITH (CHINA) WATER HEATER CO. LTD 336 YAOXIN AVENUE NANJING F4 210038
Goodwin Wallace E officer: SVP; Pres & GM, Lochinvar, LLC LOCHINVAR, LLC 300 MADDOX SIMPSON PARKWAY LEBANON TN 37090
Scheppele Stephanie Melissa officer: SVP - CIO A. O. SMITH CORPORATION 44 VANTAGE WAY NASHVILLE TN 37228
Jones Paul W director 900 COMMERCE DRIVE, SUITE 302 OAK BROOK IL 60523
Smith Mark D director PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> Ownership Information: SMITH MARK D a.header:link {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:visited {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:hover {color: #191970;}
Rajendra Ajita G director, officer: Executive Chairman A. O. SMITH WATER PRODUCTS COMPANY 500 LINDAHL PARKWAY ASHLAND CITY TN 37015
Wolf Idelle K director PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> Ownership Information: WOLF IDELLE K a.header:link {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:visited {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:hover {color: #191970;}
Brown Ronald D director 2090 FLORENCE AVENUE CINCINNATI OH 45206
Wulf Gene C director A. O. SMITH CORPORATION 11270 WEST PARK PLACE MILWAUKEE WI 53224
Smith Bruce M director PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> Ownership Information: SMITH BRUCE M a.header:link {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:visited {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:hover {color: #191970;}
Greubel William P director PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> Ownership Information: GREUBEL WILLIAM P a.header:link {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:visited {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:hover {color: #191970;}
Kadri Ilham director SEALED AIR CORPORATION 200 RIVERFRONT BOULEVARD ELMWOOD PARK NJ 07407
Stern James F officer: Exec VP, General Counsel & Sec A. O. SMITH CORPORATION 11270 WEST PARK PLACE MILWAUKEE WI 53224
Gurholt Helen E officer: Vice President and Controller A. O. SMITH CORPORATION 11270 WEST PARK PLACE MILWAUKEE WI 53224
Warren David R officer: Senior VP & President and GM A. O. SMITH CORPORATION 500 TENNESSEE WALTZ PARKWAY ASHLAND CITY TN 37015

A.O. Smith Headlines

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