News Communications (News Communications) Operating Income : $-0.96 Mil (TTM As of Dec. 2004)

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What is News Communications Operating Income?

News Communications's Operating Income for the six months ended in Dec. 2004 was $-0.96 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Dec. 2004 was $-0.96 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. News Communications's Operating Income for the six months ended in Dec. 2004 was $-0.96 Mil. News Communications's Revenue for the six months ended in Dec. 2004 was $12.17 Mil. Therefore, News Communications's Operating Margin % for the quarter that ended in Dec. 2004 was -7.90%.

News Communications'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. News Communications's annualized ROC % for the quarter that ended in Dec. 2004 was -43.76%. News Communications's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2004 was -321.40%.

News Communications Operating Income Historical Data

The historical data trend for News Communications'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.

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News Communications Operating Income Chart

News Communications Annual Data

Trend

Nov96

Nov97

Nov98

Nov99

Dec00

Dec01

Dec02

Dec03

Dec04

Operating Income

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-1.49

-1.64

-0.67

-1.34

-0.96

News Communications Semi-Annual Data
	Nov96	Nov97	Nov98	Nov99	Dec00	Dec01	Dec02	Dec03	Dec04
Operating Income	Get a 7-Day Free Trial				-1.49	-1.64	-0.67	-1.34	-0.96

News Communications 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.

For stock reported annually, GuruFocus uses latest annual data as the TTM data. Operating Income for the trailing twelve months (TTM) ended in Dec. 2004 was $-0.96 Mil.

News Communications (OTCPK:NWCM) Operating Income Explanation

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

News Communications's annualized ROC % for the quarter that ended in Dec. 2004 is calculated as:

	ROC % (Q: Dec. 2004 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2003 )	+	Invested Capital (Q: Dec. 2004 ))	/ count )
=	-0.961 * ( 1 - -4.42% )	/	( (2.879	+	1.707)	/ 2 )
=	-1.0034762	/	2.293
=	-43.76 %

where

	Invested Capital		(Q: Dec. 2003 )
=	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	))
=	4.464	-	2.099	-	( 1.167	-	max(0, 3.681	-	3.167	+	1.167	))
=	2.879

	Invested Capital		(Q: Dec. 2004 )
=	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	))
=	2.824	-	2.596	-	( 0.421	-	max(0, 3.144	-	1.665	+	0.421	))
=	1.707

Note: The Operating Income data used here is one times the annual (Dec. 2004) data.

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

News Communications's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2004 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Dec. 2004 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Dec. 2003		Q: Dec. 2004
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	-0.961	/	( ( (0.354 + max(-2.517, 0))	+	(0.244 + max(-1.891, 0)) )	/	2 )
=	-0.961	/	( ( 0.354	+	0.244 )	/	2 )
=	-0.961	/	0.299
=	-321.40 %

where Working Capital is:

	Working Capital		(Q: Dec. 2003 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(0	+	0	+	1.154)	-	(2.099	+	0	+	1.572)
=	-2.517

	Working Capital		(Q: Dec. 2004 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(1.015	+	0	+	0.219)	-	(2.596	+	0	+	0.529)
=	-1.891

When net working capital is negative, 0 is used.

Note: The EBIT data used here is one times the annual (Dec. 2004) EBIT data.

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

News Communications's Operating Margin % for the quarter that ended in Dec. 2004 is calculated as:

Operating Margin %	=	Operating Income (Q: Dec. 2004 )	/	Revenue (Q: Dec. 2004 )
	=	-0.961	/	12.168
	=	-7.90 %

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.

News Communications Operating Income Related Terms

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News Communications (News Communications) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Media - Diversified » News Communications Inc (OTCPK:NWCM) » Definitions » Operating Income

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Traded in Other Exchanges

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Address

Website

News Communications, Inc. is engaged in publishing & distribution of advertiser-supported newspapers & magazines. It publishes three newspapers, two magazines including Dans Hampton Style & Dans Hampton Sports; & a guide, Dans Hampton Style Insider Guide.

Executives

Ross Wilbur L Jr

director

328 EL VEDADO ROAD, PALM BEACH FL 33480

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