Invensys (FRA:SBPD) Operating Income : €94 Mil (TTM As of Sep. 2013)

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What is Invensys Operating Income?

Invensys's Operating Income for the six months ended in Sep. 2013 was €95 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Sep. 2013 was €94 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Invensys's Operating Income for the six months ended in Sep. 2013 was €95 Mil. Invensys's Revenue for the six months ended in Sep. 2013 was €1,023 Mil. Therefore, Invensys's Operating Margin % for the quarter that ended in Sep. 2013 was 9.28%.

Invensys'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. Invensys's annualized ROC % for the quarter that ended in Sep. 2013 was 11.34%. Invensys's annualized ROC (Joel Greenblatt) % for the quarter that ended in Sep. 2013 was 30.07%.

Invensys Operating Income Historical Data

The historical data trend for Invensys'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.

Invensys Operating Income Chart

Invensys Annual Data

Trend

Mar04

Mar05

Mar06

Mar07

Mar08

Mar09

Mar10

Mar11

Mar12

Mar13

Operating Income

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193.13

247.52

277.60

71.87

50.07

Invensys Semi-Annual Data
	Mar03	Sep04	Mar05	Sep05	Mar06	Sep06	Mar07	Sep07	Mar08	Sep08	Mar09	Sep09	Mar10	Sep10	Mar11	Sep11	Mar12	Sep12	Mar13	Sep13
Operating Income	Get a 7-Day Free Trial															89.44	-21.56	55.07	-1.16	94.98

Invensys 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 Sep. 2013 adds up the semi-annually data reported by the company within the most recent 12 months, which was €94 Mil.

Invensys (FRA:SBPD) Operating Income Explanation

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

Invensys's annualized ROC % for the quarter that ended in Sep. 2013 is calculated as:

	ROC % (Q: Sep. 2013 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2013 )	+	Invested Capital (Q: Sep. 2013 ))	/ count )
=	189.968 * ( 1 - 7.5% )	/	( (1851.403	+	1247.854)	/ 2 )
=	175.7204	/	1549.6285
=	11.34 %

where

	Invested Capital		(Q: Mar. 2013 )
=	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	))
=	2588.471	-	448.296	-	( 288.772	-	max(0, 760.356	-	1781.538	+	288.772	))
=	1851.403

	Invested Capital		(Q: Sep. 2013 )
=	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	))
=	2395.975	-	561.594	-	( 586.527	-	max(0, 702.883	-	1380.832	+	586.527	))
=	1247.854

Note: The Operating Income data used here is two times the semi-annual (Sep. 2013) data.

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

Invensys's annualized ROC (Joel Greenblatt) % for the quarter that ended in Sep. 2013 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Sep. 2013 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Mar. 2013		Q: Sep. 2013
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	189.968	/	( ( (225.894 + max(733.574, 0))	+	(211.34 + max(92.609, 0)) )	/	2 )
=	189.968	/	( ( 959.468	+	303.949 )	/	2 )
=	189.968	/	631.7085
=	30.07 %

where Working Capital is:

	Working Capital		(Q: Mar. 2013 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(338.842	+	129.249	+	1024.675)	-	(448.296	+	0	+	310.896)
=	733.574

	Working Capital		(Q: Sep. 2013 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(432.178	+	131.79	+	230.337)	-	(561.594	+	0	+	140.102)
=	92.609

When net working capital is negative, 0 is used.

Note: The EBIT data used here is two times the semi-annual (Sep. 2013) EBIT data.

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

Invensys's Operating Margin % for the quarter that ended in Sep. 2013 is calculated as:

Operating Margin %	=	Operating Income (Q: Sep. 2013 )	/	Revenue (Q: Sep. 2013 )
	=	94.984	/	1023.454
	=	9.28 %

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.

Invensys Operating Income Related Terms

Thank you for viewing the detailed overview of Invensys's Operating Income provided by GuruFocus.com. Please click on the following links to see related term pages.

Invensys (FRA:SBPD) Business Description

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Website

http://www.invensys.com

Invensys PLC is a technology company that works in partnership with industrial and commercial customers to design and supply advanced technologies that optimise operational performance and proï¬tability. The Company is grouped into four new business segments - Software, Industrial Automation, Energy Controls and Appliance. The Company's divisions include; Invensys Operations Management which is a technology, software and consulting business that creates and applies technologies to enable the safe and efï¬cient operation of industrial and commercial operations such as oil reï¬neries, fossil fuel and nuclear power plants, petrochemical works and other manufacturing sites. Invensys Controls designs, engineers and manufactures products, components, systems and services used in appliances, heating, air conditioning/cooling and refrigeration products across a range of industries in residential and commercial markets. The Software segment consists of the software businesses previously within Invensys Operations Management and includes Wonderware, SimSciTM and Avantis brands. Industrial Automation segment consists of the systems businesses of our Foxboro distributed control systems (DCS) and Triconex safety systems with the addition of the Foxboro measurement and instrumentation products previously within the equipment business of Invensys Operations Management. Energy Controls segment consists of the Eurotherm and IMServ businesses previously included within the equipment business of Invensys Operations Management, together with the residential heating and commercial businesses that were formerly part of Invensys Controls. Appliance segment consists of the Appliance controls line of business previously within Invensys Controls, together with the appliance replacement parts business formerly within Wholesale, also part of the former Invensys Controls.

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