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H&E Equipment Services's Operating Income for the three months ended in Dec. 2023 was $80 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Dec. 2023 was $279 Mil.
Operating Margin % is calculated as Operating Income divided by its Revenue. H&E Equipment Services's Operating Income for the three months ended in Dec. 2023 was $80 Mil. H&E Equipment Services's Revenue for the three months ended in Dec. 2023 was $386 Mil. Therefore, H&E Equipment Services's Operating Margin % for the quarter that ended in Dec. 2023 was 20.66%.
Good Sign:
H&E Equipment Services Inc operating margin is expanding. Margin expansion is usually a good sign.
H&E Equipment Services's 5-Year average Growth Rate for Operating Margin % was 8.30% per year.
Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. H&E Equipment Services's annualized ROC % for the quarter that ended in Dec. 2023 was 10.64%. H&E Equipment Services's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2023 was 14.58%.
The historical data trend for H&E Equipment Services'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.
H&E Equipment Services Annual Data | |||||||||||||||||||||
Trend | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||||
Operating Income | Get a 7-Day Free Trial | 155.85 | 91.17 | 124.57 | 211.32 | 279.03 |
H&E Equipment Services 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 | 64.88 | 46.04 | 69.10 | 84.17 | 79.72 |
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 $279 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.
H&E Equipment Services (NAS:HEES) Operating Income Explanation
1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.
H&E Equipment Services'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 ) |
= | 318.876 * ( 1 - 19.42% ) | / | ( (2359.807 | + | 2471.407) | / 2 ) |
= | 256.9502808 | / | 2415.607 | |||
= | 10.64 % |
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 | )) |
= | 2589.134 | - | 222.408 | - | ( 6.919 | - | max(0, 222.408 | - | 410.61 | + | 6.919 | )) |
= | 2359.807 |
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 | )) |
= | 2639.886 | - | 159.979 | - | ( 8.5 | - | max(0, 166.787 | - | 374.601 | + | 8.5 | )) |
= | 2471.407 |
Note: The Operating Income data used here is four times the quarterly (Dec. 2023) data.
2. Joel Greenblatt's definition of Return on Capital:
H&E Equipment Services'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 ) |
= | 331.1 | / | ( ( (2049.177 + max(181.283, 0)) | + | (2119.945 + max(191.161, 0)) ) | / | 2 ) |
= | 331.1 | / | ( ( 2230.46 | + | 2311.106 ) | / | 2 ) |
= | 331.1 | / | 2270.783 | ||||
= | 14.58 % |
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) |
= | (253.326 | + | 137.017 | + | 13.348) | - | (222.408 | + | 0 | + | 0) |
= | 181.283 |
Working Capital | (Q: Dec. 2023 ) | ||||||||||
= | (Accounts Receivable | + | Total Inventories | + | Other Current Assets) | - | (Accounts Payable & Accrued Expense | + | Defer. Rev. | + | Other Current Liabilities) |
= | (239.277 | + | 109.931 | + | 8.74) | - | (159.979 | + | 6.808 | + | 0) |
= | 191.161 |
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 %:
H&E Equipment Services'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 ) |
= | 79.719 | / | 385.806 | |
= | 20.66 % |
* 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.
Thank you for viewing the detailed overview of H&E Equipment Services's Operating Income provided by GuruFocus.com. Please click on the following links to see related term pages.
Suzanne H Wood | director | 1200 URBAN CENTER DRIVE, BIRMINGHAM AL 35242 |
John Mcdowell Engquist | officer: President & COO | 7500 PECUE LANE, BATON ROUGE LA 70809 |
Gary W Bagley | director | H&E EQUIPMENT SERVICES, 4899 WEST 2100 SOUTH, SALT LAKE CITY UT 84120 |
Jacob Thomas | director | 840 CRESCENT CENTRE DR, STE 600, FRANKLIN TN 37067 |
Paul Arnold | director | C/O CORT BUSINESS SERVICE CORP, 4401 FAIR LAKES COURT, FAIRFAX VA 22033 |
Bradley W Barber | director, officer: CEO & President | H&E EQUIPMENT SERVICES, 11100 MEAD ROAD, SUITE 200, BATON ROUGE LA 70816 |
Patrick Edsell | director | |
Lawrence C Karlson | director | C/O CDI CORP., 1717 ARCH ST 35TH FLOOR, PHILADELPHIA PA 19103-2768 |
John Sawyer | director | PENHALL CO., 1801 PENHALL WAY/ POB 4609, ANAHEIM CA 92803 |
Thompson Mary Patricia B | director | 651 S. STRATFORD DRIVE, SUITE 100, MERIDIAN ID 83642 |
Bruce Bruckmann | director | C/O MOHAWK INDUSTRIES INC, P O BOX 12069, CALHOUN GA 30703 |
John Engquist | director, 10 percent owner, officer: CEO & President | H&E EQUIPMENT SERVICES, 11100 MEAD ROAD, SUITE 200, BATON ROUGE LA 70816 |
Leslie S Magee | officer: CFO & Secretary | H&E EQUIPMENT SERVICES, 11100 MEAD ROAD, SUITE 200, BATON ROUGE LA 70816 |
John D Jones | officer: V.P., Product Support | H&E EQUIPMENT SERVICES, 11100 MEAD ROAD, SUITE 200, BATON ROUGE LA 70816 |
William W Fox | officer: V.P., Cranes & Earthmoving | H&E EQUIPMENT SERVICES, 11100 MEAD ROAD, SUITE 200, BATON ROUGE LA 70816 |
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