Hyperion Therapeutics (FRA:0HY) Operating Income : €-1.2 Mil (TTM As of Mar. 2015)

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What is Hyperion Therapeutics Operating Income?

Hyperion Therapeutics's Operating Income for the three months ended in Mar. 2015 was €4.3 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Mar. 2015 was €-1.2 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Hyperion Therapeutics's Operating Income for the three months ended in Mar. 2015 was €4.3 Mil. Hyperion Therapeutics's Revenue for the three months ended in Mar. 2015 was €28.8 Mil. Therefore, Hyperion Therapeutics's Operating Margin % for the quarter that ended in Mar. 2015 was 15.04%.

Hyperion Therapeutics'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. Hyperion Therapeutics's annualized ROC % for the quarter that ended in Mar. 2015 was 54.20%. Hyperion Therapeutics's annualized ROC (Joel Greenblatt) % for the quarter that ended in Mar. 2015 was 3,517.04%.

Hyperion Therapeutics Operating Income Historical Data

The historical data trend for Hyperion Therapeutics'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.

Hyperion Therapeutics Operating Income Chart

Hyperion Therapeutics Annual Data

Trend

Dec10

Dec11

Dec12

Dec13

Dec14

Operating Income

-20.11

-19.88

-21.74

-9.79

-3.41

Hyperion Therapeutics Quarterly Data
	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14	Mar15
Operating Income	Get a 7-Day Free Trial													1.23	11.40	-22.37	5.46	4.34

Hyperion Therapeutics 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. 2015 adds up the quarterly data reported by the company within the most recent 12 months, which was €-1.2 Mil.

Hyperion Therapeutics (FRA:0HY) Operating Income Explanation

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

Hyperion Therapeutics's annualized ROC % for the quarter that ended in Mar. 2015 is calculated as:

	ROC % (Q: Mar. 2015 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2014 )	+	Invested Capital (Q: Mar. 2015 ))	/ count )
=	17.34 * ( 1 - 17.73% )	/	( (17.226	+	35.419)	/ 2 )
=	14.265618	/	26.3225
=	54.20 %

where

	Invested Capital		(Q: Dec. 2014 )
=	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	))
=	146.317	-	24.474	-	( 111.337	-	max(0, 24.656	-	129.273	+	111.337	))
=	17.226

	Invested Capital		(Q: Mar. 2015 )
=	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	))
=	180.208	-	33.349	-	( 118.86	-	max(0, 34.984	-	146.424	+	118.86	))
=	35.419

Note: The Operating Income data used here is four times the quarterly (Mar. 2015) data.

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

Hyperion Therapeutics's annualized ROC (Joel Greenblatt) % for the quarter that ended in Mar. 2015 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Mar. 2015 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Dec. 2014		Q: Mar. 2015
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	33.324	/	( ( (0.905 + max(-6.72, 0))	+	(0.99 + max(-6.007, 0)) )	/	2 )
=	33.324	/	( ( 0.905	+	0.99 )	/	2 )
=	33.324	/	0.9475
=	3,517.04 %

where Working Capital is:

	Working Capital		(Q: Dec. 2014 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(12.055	+	3.748	+	2.133)	-	(24.474	+	0.182	+	0)
=	-6.72

	Working Capital		(Q: Mar. 2015 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(19.91	+	5.172	+	2.482)	-	(33.349	+	0.222	+	7.105427357601E-15)
=	-6.007

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Mar. 2015) EBIT data.

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

Hyperion Therapeutics's Operating Margin % for the quarter that ended in Mar. 2015 is calculated as:

Operating Margin %	=	Operating Income (Q: Mar. 2015 )	/	Revenue (Q: Mar. 2015 )
	=	4.335	/	28.822
	=	15.04 %

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.

Hyperion Therapeutics Operating Income Related Terms

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Hyperion Therapeutics (FRA:0HY) Business Description

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Website

http://www.hyperiontx.com

Hyperion Therapeutics Inc., was incorporated in Delaware on November 1, 2006. The Company completed its initial public offering on July 2012. It is a commercial biopharmaceutical company, engaged in the development and commercialization of novel therapeutics to treat disorders in the areas of orphan diseases and hepatology. Its products, RAVICTI (glycerol phenylbutyrate) Oral liquid, BUPHENYL and AMMONAPS (sodium phenylbutyrate) Tablets and Powder, are designed to lower ammonia in the blood. The Company has developed RAVICTI to treat urea cycle disorders including 7 of the 8 prevalent UCD subtypes, and is developing glycerol phenylbutyrate, the active pharmaceutical ingredient in RAVICTI, to treat hepatic encephalopathy. RAVICTI is indicated for use as a nitrogen-binding agent for chronic management of adult and pediatric patients above 2 years of age with urea cycle disorders who cannot be managed by dietary protein restriction and/or amino acid supplementation alone. It distributes RAVICTI through two specialty pharmacies with a single dedicated call center responsible for interfacing with patients, physicians and payors. BUPHENYL is indicated in all patients with neonatal-onset deficiency (complete enzymatic deficiency, presenting within the first 28 days of life). It is also indicated in patients with late-onset disease (partial enzymatic deficiency, presenting after the first month of life) who have a history of hyperammonemic encephalopathy. The Company faces competition from established pharmaceutical and biotechnology companies, as well as from academic institutions, government agencies and private and public research institutions, among others, which may in the future develop products to treat UCD or HE. The Company is subject to numerous federal, state and local laws relating to such matters as safe working conditions, manufacturing practices, environmental protection, fire hazard control, and disposal of hazardous or potentially hazardous substances.

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