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Helmerich & Payne Inc  (NYSE:HP) Operating Income: $-236 Mil (TTM As of Jun. 2017)

Helmerich & Payne Inc's Operating Income for the three months ended in Jun. 2017 was $-28 Mil. ts operating income for the trailing twelve months (TTM) ended in Jun. 2017 was $-236 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Helmerich & Payne Inc's Operating Income for the three months ended in Jun. 2017 was $-28 Mil. Helmerich & Payne Inc's Revenue for the three months ended in Jun. 2017 was $499 Mil. Therefore, Helmerich & Payne Inc's Operating Margin % for the quarter that ended in Jun. 2017 was -5.62%.

Helmerich & Payne Inc'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. Helmerich & Payne Inc's annualized ROC % for the quarter that ended in Jun. 2017 was -1.89%. Helmerich & Payne Inc's annualized ROC (Joel Greenblatt) % for the quarter that ended in Jun. 2017 was -2.04%.


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.

Helmerich & Payne Inc Annual Data

Sep07 Sep08 Sep09 Sep10 Sep11 Sep12 Sep13 Sep14 Sep15 Sep16
Operating Income Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 909.60 956.66 1,053.17 671.96 -25.97

Helmerich & Payne Inc Quarterly Data

Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17
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 -13.26 -93.00 -49.16 -65.67 -28.03

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.

Helmerich & Payne Inc's Operating Income for the fiscal year that ended in Sep. 2016 is calculated as

Operating Income(A: Sep. 2016 )
=Revenue-Cost of Goods Sold-Selling, General, & Admin. Expense
=1624.232-898.805-146.183
-Research & Development-Depreciation, Depletion and Amortization-Others
-10.269-598.587--3.646
=-26

Helmerich & Payne Inc's Operating Income for the quarter that ended in is calculated as

Operating Income(Q: Jun. 2017 )
=Revenue-Cost of Goods Sold-Selling, General, & Admin. Expense
=498.564-337.463-42.89
-Research & Development-Depreciation, Depletion and Amortization-Others (1)
-3.058-145.043--1.862
=-28

Operating Income(Q: Jun. 2017 )
=EBITDA-Depreciation, Depletion and Amortization-Others (2)
=117.804-145.043-0.789
=-28

Operating Income for the trailing twelve months (TTM) ended in Jun. 2017 was -93.001 (Sep. 2016 ) + -49.164 (Dec. 2016 ) + -65.672 (Mar. 2017 ) + -28.028 (Jun. 2017 ) = $-236 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.

Helmerich & Payne Inc's annualized ROC % for the quarter that ended in Jun. 2017 is calculated as:

ROC %(Q: Jun. 2017 )
=NOPAT/Average Invested Capital
=Operating Income*(1-Tax Rate)/( (Invested Capital (Q: Mar. 2017 ) + Invested Capital (Q: Jun. 2017 ))/2)
=-112.112 * ( 1 - 31.18% )/( (4050.009 + 4129.86)/2)
=-77.1554784/4089.9345
=-1.89 %

where

Invested Capital(Q: Mar. 2017 )
=Book Value of Debt + Book Value of Equity - Cash
=Long-Term Debt & Capital Lease Obligation + Current Portion of Long-Term Debt + Total Equity - Cash
=492.373 + 0 + 4347.394 - 789.758
=4050.009

Invested Capital(Q: Jun. 2017 )
=Book Value of Debt + Book Value of Equity - Cash
=Long-Term Debt & Capital Lease Obligation + Current Portion of Long-Term Debt + Total Equity - Cash
=492.637 + 0 + 4249.904 - 612.681
=4129.86

Note: The Operating Income data used here is four times the quarterly (Jun. 2017) operating income data.

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

Helmerich & Payne Inc's annualized ROC (Joel Greenblatt) % for the quarter that ended in Jun. 2017 is calculated as:

ROC (Joel Greenblatt's)(Q: Jun. 2017 )
=EBIT/Average of (Net fixed Assets + Net Working Capital)
=EBIT/Average of (Property, Plant and Equipment+Net Working Capital)
     Q: Mar. 2017  Q: Jun. 2017
=EBIT/( ( (Property, Plant and Equipment + Net Working Capital) + (Property, Plant and Equipment + Net Working Capital) )/2 )
=-108.956/( ( (5061.368 + max(272.712, 0)) + (5062.914 + max(303.778, 0)) )/2 )
=-108.956/( ( 5334.08 + 5366.692 )/2 )
=-108.956/5350.386
=-2.04 %

where Working Capital is:

Working Capital(Q: Mar. 2017 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(345.546 + 131.679 + 96.904) - (301.377 + 0 + 0.04)
=272.712

Working Capital(Q: Jun. 2017 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(440.872 + 138.403 + 58.432) - (333.849 + 0 + 0.08)
=303.778

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Jun. 2017) EBIT data.

3. Operating Income is also linked to Operating Margin:

Helmerich & Payne Inc's Operating Margin % for the quarter that ended in Jun. 2017 is calculated as:

Operating Margin %=Operating Income (Q: Jun. 2017 )/Revenue (Q: Jun. 2017 )
=-28.028/498.564
=-5.62 %

* 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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