Archer-Daniels Midland Co (NYSE:ADM) Operating Income

: $4,212 Mil (TTM As of Dec. 2022)

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Archer-Daniels Midland Co's Operating Income for the three months ended in Dec. 2022 was $865 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Dec. 2022 was $4,212 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Archer-Daniels Midland Co's Operating Income for the three months ended in Dec. 2022 was $865 Mil. Archer-Daniels Midland Co's Revenue for the three months ended in Dec. 2022 was $25,939 Mil. Therefore, Archer-Daniels Midland Co's Operating Margin % for the quarter that ended in Dec. 2022 was 3.33%.

Good Sign:

Archer-Daniels Midland Co operating margin is expanding. Margin expansion is usually a good sign.

Archer-Daniels Midland Co's 5-Year average Growth Rate for Operating Margin % was 8.60% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. Archer-Daniels Midland Co's annualized ROC % for the quarter that ended in Dec. 2022 was 6.00%. Archer-Daniels Midland Co's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2022 was 25.10%.

Archer-Daniels Midland Co Operating Income Historical Data

The historical data trend for Archer-Daniels Midland Co'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.

Archer-Daniels Midland Co Annual Data

Trend

Dec13

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Operating Income

2,016.00

1,654.00

1,766.00

2,993.00

4,212.00

Archer-Daniels Midland Co Quarterly Data
	Mar18	Jun18	Sep18	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22
Operating Income																864.00	1,068.00	1,286.00	993.00	865.00

Archer-Daniels Midland Co 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. 2022 adds up the quarterly data reported by the company within the most recent 12 months, which was $4,212 Mil.

Archer-Daniels Midland Co (NYSE:ADM) Operating Income Explanation

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

Archer-Daniels Midland Co's annualized ROC % for the quarter that ended in Dec. 2022 is calculated as:

	ROC % (Q: Dec. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2022 )	+	Invested Capital (Q: Dec. 2022 ))	/ count )
=	3460 * ( 1 - 15.58% )	/	( (48549	+	48851)	/ 2 )
=	2920.932	/	48700
=	6.00 %

where

	Invested Capital		(Q: Sep. 2022 )
=	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	))
=	58304	-	8656	-	( 1099	-	max(0, 22936	-	34569	+	1099	))
=	48549

	Invested Capital		(Q: Dec. 2022 )
=	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	))
=	59774	-	9886	-	( 1037	-	max(0, 24191	-	35410	+	1037	))
=	48851

Note: The Operating Income data used here is four times the quarterly (Dec. 2022) data.

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

Archer-Daniels Midland Co's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2022 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Dec. 2022 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Sep. 2022		Q: Dec. 2022
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	5388	/	( ( (10588 + max(10745, 0))	+	(11021 + max(10585, 0)) )	/	2 )
=	5388	/	( ( 21333	+	21606 )	/	2 )
=	5388	/	21469.5
=	25.10 %

where Working Capital is:

	Working Capital		(Q: Sep. 2022 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(6007	+	13282	+	13044)	-	(8656	+	10782	+	2150)
=	10745

	Working Capital		(Q: Dec. 2022 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(6235	+	14771	+	12033)	-	(9886	+	10550	+	2018)
=	10585

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Dec. 2022) EBIT data.

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

Archer-Daniels Midland Co's Operating Margin % for the quarter that ended in Dec. 2022 is calculated as:

Operating Margin %	=	Operating Income (Q: Dec. 2022 )	/	Revenue (Q: Dec. 2022 )
	=	865	/	25939
	=	3.33 %

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.

Archer-Daniels Midland Co Operating Income Related Terms

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Archer-Daniels Midland Co (NYSE:ADM) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » Archer-Daniels Midland Co (NYSE:ADM) » Definitions » Operating Income

Comparable Companies

Traded in Other Exchanges

ADM:Mexico ADM:Germany A1DM34:Brazil ARDA:Austria

Address

77 West Wacker Drive, Suite 4600, Chicago, IL, USA, 60601

Website

https://www.adm.com

Archer-Daniels Midland is a major processor of oilseeds, corn, wheat, and other agricultural commodities. Additionally, the company owns an extensive network of logistical assets to store and transport crops around the globe. ADM also runs a nutrition business that focuses on both human and animal ingredients. The company is also a large producer of corn-based sweeteners, starches, and ethanol.

Executives

Collins James C. Jr.	director	1007 MARKET STREET, D-9058, WILMINGTON DE 19898
Theodore Iii Colbert	director	C/O THE BOEING COMPANY, 100 RIVERSIDE PLAZA, CHICAGO IL 60606-1596
Strader Fruit Molly L	officer: Vice Pres., Corp. Controller	77 WEST WACKER DRIVE, SUITE 4600, CHICAGO IL 60601
Jennifer L Weber	officer: Senior Vice President	1000 LOWES BOULEVARD, MOORESVILLE NC 28117
Lei Zhang Schlitz	director	5757 N. GREENBAY AVENUE, GLENDALE WI 53129
Michael S Burke	director	C/O AECOM TECHNOLOGY CORPORATION, 555 S. FLOWER STREET, SUITE 3700, LOS ANGELES CA 90071
Stefano Rettore	officer: Senior Vice President	77 WEST WACKER DRIVE, SUITE 4600, CHICAGO IL 60601
Suzan F. Harrison	director	77 WEST WACKER DRIVE, SUITE 4600, CHICAGO IL 60601
Debra A. Sandler	director	KEURIG DR PEPPER INC., 53 SOUTH AVE., BURLINGTON MA 01803
Vincent F Macciocchi	officer: Senior Vice President	77 W. WACKER DR., SUITE 4600, CHICAGO IL 60601
Christopher M Cuddy	officer: President-Corn	77 W. WACKER DR., SUITE 4600, CHICAGO IL 60601
Gregory A Morris	officer: Senior Vice President	77 W. WACKER DR., SUITE 4600, CHICAGO IL 60601
Francisco J Sanchez	director	77 W. WACKER DR., SUITE 4600, CHICAGO IL 60601
Benjamin I Bard	officer: Vice President	4666 FARIES PARKWAY, DECATUR IL 62526
D Cameron Findlay	officer: Senior Vice President	77 W. WACKER DR., SUITE 2600, CHICAGO IL 60601