ARRIS International (ARRIS International) Operating Income : $224 Mil (TTM As of Dec. 2018)

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What is ARRIS International Operating Income?

ARRIS International's Operating Income for the three months ended in Dec. 2018 was $68 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Dec. 2018 was $224 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. ARRIS International's Operating Income for the three months ended in Dec. 2018 was $68 Mil. ARRIS International's Revenue for the three months ended in Dec. 2018 was $1,787 Mil. Therefore, ARRIS International's Operating Margin % for the quarter that ended in Dec. 2018 was 3.83%.

ARRIS International's 5-Year average Growth Rate for Operating Margin % was 0.00% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. ARRIS International's annualized ROC % for the quarter that ended in Dec. 2018 was 5.70%. ARRIS International's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2018 was 45.36%.

ARRIS International Operating Income Historical Data

The historical data trend for ARRIS International'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.

ARRIS International Operating Income Chart

ARRIS International Annual Data

Trend

Dec09

Dec10

Dec11

Dec12

Dec13

Dec14

Dec15

Dec16

Dec17

Dec18

Operating Income

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378.83

240.23

271.05

276.37

224.21

ARRIS International Quarterly Data
	Mar14	Jun14	Sep14	Dec14	Mar15	Jun15	Sep15	Dec15	Mar16	Jun16	Sep16	Dec16	Mar17	Jun17	Sep17	Dec17	Mar18	Jun18	Sep18	Dec18
Operating Income	Get a 7-Day Free Trial															110.04	29.97	67.72	58.07	68.45

ARRIS International 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. 2018 adds up the quarterly data reported by the company within the most recent 12 months, which was $224 Mil.

ARRIS International (NAS:ARRS) Operating Income Explanation

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

ARRIS International's annualized ROC % for the quarter that ended in Dec. 2018 is calculated as:

	ROC % (Q: Dec. 2018 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2018 )	+	Invested Capital (Q: Dec. 2018 ))	/ count )
=	273.792 * ( 1 - -5.4% )	/	( (5164.351	+	4961.312)	/ 2 )
=	288.576768	/	5062.8315
=	5.70 %

where

	Invested Capital		(Q: Sep. 2018 )
=	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	))
=	7186.605	-	1501.857	-	( 520.397	-	max(0, 1848.595	-	2843.385	+	520.397	))
=	5164.351

	Invested Capital		(Q: Dec. 2018 )
=	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	))
=	7327.869	-	1631.086	-	( 735.471	-	max(0, 1967.767	-	3112.639	+	735.471	))
=	4961.312

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

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

ARRIS International's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2018 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Dec. 2018 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Sep. 2018		Q: Dec. 2018
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	265.672	/	( ( (289.82 + max(323.056, 0))	+	(287.671 + max(270.895, 0)) )	/	2 )
=	265.672	/	( ( 612.876	+	558.566 )	/	2 )
=	265.672	/	585.721
=	45.36 %

where Working Capital is:

	Working Capital		(Q: Sep. 2018 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(1117.641	+	717.272	+	252.953)	-	(1501.857	+	115.989	+	146.964)
=	323.056

	Working Capital		(Q: Dec. 2018 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(1225.975	+	740.205	+	188.62)	-	(1631.086	+	111.254	+	141.565)
=	270.895

When net working capital is negative, 0 is used.

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

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

ARRIS International's Operating Margin % for the quarter that ended in Dec. 2018 is calculated as:

Operating Margin %	=	Operating Income (Q: Dec. 2018 )	/	Revenue (Q: Dec. 2018 )
	=	68.448	/	1787.142
	=	3.83 %

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.

ARRIS International Operating Income Related Terms

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ARRIS International (ARRIS International) Business Description

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Address

3871 Lakefield Drive, Suwanee, GA, USA, 30024

Website

https://www.arris.com

ARRIS International PLC is a media entertainment and data communications solutions provider. Its innovations combine hardware, software, and services across the cloud, network, and home to power TV and Internet for millions of people around the globe. It operates in two business segments, Customer Premises Equipment, and Network & Cloud. It specializes in enabling multichannel video programming distribution including cable, telephone, and digital broadcast satellite operatorion. It operates manufacturing facilities in Taipei, Taiwan; Tijuana, Mexico, and Manaus, Brazil.