USD 1,319 Mil as of today(2020-07-12). In depth view into NRG Energy Operating Income explanation, calculation, historical data and more" />NRG Operating Income | NRG Energy - GuruFocus.com
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NRG Energy Operating Income

: USD 1,319 Mil (TTM As of Mar. 2020)
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NRG Energy's Operating Income for the three months ended in Mar. 2020 was USD 241 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Mar. 2020 was USD 1,319 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. NRG Energy's Operating Income for the three months ended in Mar. 2020 was USD 241 Mil. NRG Energy's Revenue for the three months ended in Mar. 2020 was USD 2,019 Mil. Therefore, NRG Energy's Operating Margin % for the quarter that ended in Mar. 2020 was 11.94%.

Good Sign:

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

NRG Energy's 5-Year average Growth Rate for Operating Margin % was 16.30% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. NRG Energy's annualized ROC % for the quarter that ended in Mar. 2020 was 7.45%. NRG Energy's annualized ROC (Joel Greenblatt) % for the quarter that ended in Mar. 2020 was 26.89%.


NRG Energy Operating Income 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.

NRG Energy Annual Data
Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19
Operating Income Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 595.00 403.00 734.00 1,139.00 1,311.00

NRG Energy Quarterly Data
Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20
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 233.00 322.00 541.00 215.00 241.00

NRG Energy 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 Mar. 2020 was 322 (Jun. 2019 ) + 541 (Sep. 2019 ) + 215 (Dec. 2019 ) + 241 (Mar. 2020 ) = USD 1,319 Mil.

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


NRG Energy  (NYSE:NRG) Operating Income Explanation

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

NRG Energy's annualized ROC % for the quarter that ended in Mar. 2020 is calculated as:

ROC % (Q: Mar. 2020 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Dec. 2019 ) + Invested Capital (Q: Mar. 2020 ))/ count )
=964 * ( 1 - 15.97% )/( (10801 + 10937)/ 2 )
=810.0492/10869
=7.45 %

where

Note: The Operating Income data used here is four times the quarterly (Mar. 2020) data.

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

NRG Energy's annualized ROC (Joel Greenblatt) % for the quarter that ended in Mar. 2020 is calculated as:

ROC (Joel Greenblatt) %(Q: Mar. 2020 )
=EBIT/Average of (Net fixed Assets + Net Working Capital)
=EBIT/Average of (Property, Plant and Equipment+Net Working Capital)
     Q: Dec. 2019  Q: Mar. 2020
=EBIT/( ( (Property, Plant and Equipment + Net Working Capital) + (Property, Plant and Equipment + Net Working Capital) )/ count )
=968/( ( (3057 + max(545, 0)) + (3019 + max(579, 0)) )/ 2 )
=968/( ( 3602 + 3598 )/ 2 )
=968/3600
=26.89 %

where Working Capital is:

Working Capital(Q: Dec. 2019 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(1025 + 383 + 1335) - (1385 + 0 + 813)
=545

Working Capital(Q: Mar. 2020 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(915 + 372 + 1433) - (1258 + 0 + 883)
=579

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Mar. 2020) EBIT data.

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

NRG Energy's Operating Margin % for the quarter that ended in Mar. 2020 is calculated as:

Operating Margin %=Operating Income (Q: Mar. 2020 )/Revenue (Q: Mar. 2020 )
=241/2019
=11.94 %

* 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.


NRG Energy Operating Income Related Terms


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