Apple (AAPL) Operating Income

: $118,658 Mil (TTM As of Dec. 2023)

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Apple's Operating Income for the three months ended in Dec. 2023 was $40,373 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Dec. 2023 was $118,658 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Apple's Operating Income for the three months ended in Dec. 2023 was $40,373 Mil. Apple's Revenue for the three months ended in Dec. 2023 was $119,575 Mil. Therefore, Apple's Operating Margin % for the quarter that ended in Dec. 2023 was 33.76%.

Good Sign:

Apple Inc operating margin is expanding. Margin expansion is usually a good sign.

Apple's 5-Year average Growth Rate for Operating Margin % was 4.10% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. Apple's annualized ROC % for the quarter that ended in Dec. 2023 was 47.05%. Apple's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2023 was 369.63%.

Apple Operating Income Historical Data

The historical data trend for Apple'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.

Apple Annual Data

Trend

Sep14

Sep15

Sep16

Sep17

Sep18

Sep19

Sep20

Sep21

Sep22

Sep23

Operating Income

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63,930.00

66,288.00

108,949.00

119,437.00

114,301.00

Apple Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Operating Income	Get a 7-Day Free Trial															36,016.00	28,318.00	22,998.00	26,969.00	40,373.00

Apple 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 Dec. 2023 adds up the quarterly data reported by the company within the most recent 12 months, which was $118,658 Mil.

Apple (NAS:AAPL) Operating Income Explanation

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

Apple's annualized ROC % for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	161492 * ( 1 - 15.89% )	/	( (291714	+	285649)	/ 2 )
=	135830.9212	/	288681.5
=	47.05 %

where

	Invested Capital		(Q: Sep. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	352583	-	62611	-	( 61555	-	max(0, 145308	-	143566	+	61555	))
=	291714

	Invested Capital		(Q: Dec. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	353514	-	58146	-	( 73100	-	max(0, 133973	-	143692	+	73100	))
=	285649

Note: The Operating Income data used here is four times the quarterly (Dec. 2023) data.

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

Apple's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2023 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Dec. 2023 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Sep. 2023		Q: Dec. 2023
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	161492	/	( ( (43715 + max(-78967, 0))	+	(43666 + max(-77337, 0)) )	/	2 )
=	161492	/	( ( 43715	+	43666 )	/	2 )
=	161492	/	43690.5
=	369.63 %

where Working Capital is:

	Working Capital		(Q: Sep. 2023 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(29508	+	6331	+	14695)	-	(62611	+	8061	+	58829)
=	-78967

	Working Capital		(Q: Dec. 2023 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(23194	+	6511	+	13979)	-	(58146	+	8264	+	54611)
=	-77337

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Dec. 2023) EBIT data.

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

Apple's Operating Margin % for the quarter that ended in Dec. 2023 is calculated as:

Operating Margin %	=	Operating Income (Q: Dec. 2023 )	/	Revenue (Q: Dec. 2023 )
	=	40373	/	119575
	=	33.76 %

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.

Apple Operating Income Related Terms

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Apple (AAPL) Business Description

Industry

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Comparable Companies

Traded in Other Exchanges

AAPL:Peru AAPL:Mexico AAPL:Italy APCd:UK 0R2V:UK APC8:Germany APC:Germany APC:Germany APC:Germany APC:Germany AAPL:Chile AAPL:Canada AAPL34:Brazil AAPL:Austria AAPL:Argentina

Address

One Apple Park Way, Cupertino, CA, USA, 95014

Website

https://www.apple.com

Apple is among the largest companies in the world, with a broad portfolio of hardware and software products targeted at consumers and businesses. Apple's iPhone makes up a majority of the firm sales, and Apple's other products like Mac, iPad, and Watch are designed around the iPhone as the focal point of an expansive software ecosystem. Apple has progressively worked to add new applications, like streaming video, subscription bundles, and augmented reality. The firm designs its own software and semiconductors while working with subcontractors like Foxconn and TSMC to build its products and chips. Slightly less than half of Apple's sales come directly through its flagship stores, with a majority of sales coming indirectly through partnerships and distribution.

Executives

Chris Kondo	officer: Principal Accounting Officer	1 INFINITE LOOP, CUPERTINO CA 95014
Katherine L. Adams	officer: SVP, General Counsel	APPLE INC., 1 INFINITE LOOP, CUPERTINO CA 95014
Luca Maestri	officer: Senior Vice President, CFO	1 INFINITE LOOP, CUPERTINO CA 95014
Jeffrey E Williams	officer: COO	ONE INFINITE LOOP, CUPERTINO CA 95014
Deirdre O'brien	officer: Senior Vice President	ONE APPLE PARK WAY, CUPERTINO CA 95014
Timothy D Cook	director, officer: Chief Executive Officer	C/O APPLE INC, ONE INFINITE LOOP, CUPERTINO CA 95014
Arthur D Levinson	director	C/O GENENTECH INC, 1 DNA WAY MS 49, SOUTH SAN FRANCISCO CA 94080-4990
Alex Gorsky	director	JOHNSON & JOHNSON, ONE JOHNSON & JOHNSON PLAZA, NEW BRUNSWICK NJ 08933
Monica C Lozano	director
Angela J Ahrendts	officer: Senior Vice President	1 INFINITE LOOP, CUPERTINO CA 95014
Johny Srouji	officer: Senior Vice President	1 INFINITE LOOP, CUPERTINO CA 95014
Craig Federighi	officer: Senior Vice President	807 11TH AVENUE, SUNNYVALE CA 94089
Daniel J. Riccio	officer: Senior Vice President	1 INFINITE LOOP, CUPERTINO CA 95014
Philip W Schiller	officer: Senior Vice President	C/O APPLE INC, ONE INFINITE LOOP, CUPERTINO CA 95014
Susan Wagner	director	C/O BLACKROCK, INC., 40 EAST 52ND STREET, NEW YORK NY 10022