USD 1,232 Mil (NYSE:SJM). JM Smucker Co Operating Income description, competitive comparison data, historical data and more." />JM Smucker Co Operating Income (NYSE:SJM)
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JM Smucker Co  (NYSE:SJM) Operating Income: USD 1,232 Mil (TTM As of Jul. 2018)

JM Smucker Co's Operating Income for the three months ended in Jul. 2018 was USD 235 Mil. ts operating income for the trailing twelve months (TTM) ended in Jul. 2018 was USD 1,232 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. JM Smucker Co's Operating Income for the three months ended in Jul. 2018 was USD 235 Mil. JM Smucker Co's Revenue for the three months ended in Jul. 2018 was USD 1,903 Mil. Therefore, JM Smucker Co's Operating Margin % for the quarter that ended in Jul. 2018 was 12.33%.

Good Sign:

JM Smucker Co operating margin is expanding. Margin expansion is usually a good sign.

JM Smucker Co's 5-Year average Growth Rate for Operating Margin % was 1.00% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. JM Smucker Co's annualized ROC % for the quarter that ended in Jul. 2018 was 5.34%. JM Smucker Co's annualized ROC (Joel Greenblatt) % for the quarter that ended in Jul. 2018 was 39.18%.


Historical Data

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

* Premium members only.

JM Smucker Co Annual Data

Apr09 Apr10 Apr11 Apr12 Apr13 Apr14 Apr15 Apr16 Apr17 Apr18
Operating Income Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 944.60 829.80 1,281.20 1,241.60 1,258.40

JM Smucker Co Quarterly Data

Oct13 Jan14 Apr14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Jul17 Oct17 Jan18 Apr18 Jul18
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 262.30 340.40 345.20 311.90 234.60

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.

JM Smucker Co's Operating Income for the fiscal year that ended in Apr. 2018 is calculated as

Operating Income(A: Apr. 2018 )
=Revenue-Cost of Goods Sold-Selling, General, & Admin. Expense
=7357.1-4521-1370.8
-Research & Development-Depreciation, Depletion and Amortization-Others
-0-413.1--206.2
=1,258

JM Smucker Co's Operating Income for the quarter that ended in is calculated as

Operating Income(Q: Jul. 2018 )
=Revenue-Cost of Goods Sold-Selling, General, & Admin. Expense
=1902.5-1224.3-383.3
-Research & Development-Depreciation, Depletion and Amortization-Others (1)
-0-111.9--51.6
=235

Operating Income(Q: Jul. 2018 )
=EBITDA-Depreciation, Depletion and Amortization-Others (2)
=338.6-111.9--7.9
=235

Operating Income for the trailing twelve months (TTM) ended in Jul. 2018 was 340.4 (Oct. 2017 ) + 345.2 (Jan. 2018 ) + 311.9 (Apr. 2018 ) + 234.6 (Jul. 2018 ) = USD 1,232 Mil.

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


Explanation

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

JM Smucker Co's annualized ROC % for the quarter that ended in Jul. 2018 is calculated as:

ROC %(Q: Jul. 2018 )
=NOPAT/Average Invested Capital
=Operating Income*(1-Tax Rate)/( (Invested Capital (Q: Apr. 2018 ) + Invested Capital (Q: Jul. 2018 ))/2)
=938.4 * ( 1 - 23.17% )/( (12530.5 + 14453.7)/2)
=720.97272/13492.1
=5.34 %

where

Invested Capital(Q: Apr. 2018 )
=Book Value of Debt + Book Value of Equity - Cash
=Long-Term Debt & Capital Lease Obligation + Current Portion of Long-Term Debt + Total Stockholders Equity - Cash
=4688 + 144 + 7891.1 - 192.6
=12530.5

Invested Capital(Q: Jul. 2018 )
=Book Value of Debt + Book Value of Equity - Cash
=Long-Term Debt & Capital Lease Obligation + Current Portion of Long-Term Debt + Total Stockholders Equity - Cash
=6184.9 + 530 + 7930.8 - 192
=14453.7

Note: The Operating Income data used here is four times the quarterly (Jul. 2018) operating income data.

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

JM Smucker Co's annualized ROC (Joel Greenblatt) % for the quarter that ended in Jul. 2018 is calculated as:

ROC (Joel Greenblatt's)(Q: Jul. 2018 )
=EBIT/Average of (Net fixed Assets + Net Working Capital)
=EBIT/Average of (Property, Plant and Equipment+Net Working Capital)
     Q: Apr. 2018  Q: Jul. 2018
=EBIT/( ( (Property, Plant and Equipment + Net Working Capital) + (Property, Plant and Equipment + Net Working Capital) )/2 )
=906.8/( ( (1729.1 + max(472.6, 0)) + (1827.9 + max(599.8, 0)) )/2 )
=906.8/( ( 2201.7 + 2427.7 )/2 )
=906.8/2314.7
=39.18 %

where Working Capital is:

Working Capital(Q: Apr. 2018 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(385.6 + 854.4 + 122.4) - (702.3 + 0 + 187.5)
=472.6

Working Capital(Q: Jul. 2018 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(504.2 + 1017.4 + 92.2) - (673.7 + 0 + 340.3)
=599.8

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Jul. 2018) EBIT data.

3. Operating Income is also linked to Operating Margin:

JM Smucker Co's Operating Margin % for the quarter that ended in Jul. 2018 is calculated as:

Operating Margin %=Operating Income (Q: Jul. 2018 )/Revenue (Q: Jul. 2018 )
=234.6/1902.5
=12.33 %

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


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