Agrium (TSX:AGU) Operating Income : C$1,416 Mil (TTM As of Sep. 2017)

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What is Agrium Operating Income?

Agrium's Operating Income for the three months ended in Sep. 2017 was C$-25 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Sep. 2017 was C$1,416 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Agrium's Operating Income for the three months ended in Sep. 2017 was C$-25 Mil. Agrium's Revenue for the three months ended in Sep. 2017 was C$2,925 Mil. Therefore, Agrium's Operating Margin % for the quarter that ended in Sep. 2017 was -0.84%.

Agrium'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. Agrium's annualized ROC % for the quarter that ended in Sep. 2017 was -0.40%. Agrium's annualized ROC (Joel Greenblatt) % for the quarter that ended in Sep. 2017 was -0.82%.

Agrium Operating Income Historical Data

The historical data trend for Agrium'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.

Agrium Operating Income Chart

Agrium Annual Data

Trend

Dec07

Dec08

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Dec16

Operating Income

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2,133.02

1,577.76

1,298.50

2,194.08

1,516.64

Agrium Quarterly Data
	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14	Mar15	Jun15	Sep15	Dec15	Mar16	Jun16	Sep16	Dec16	Mar17	Jun17	Sep17
Operating Income	Get a 7-Day Free Trial															68.16	240.10	45.52	1,155.34	-24.56

Agrium 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. 2017 adds up the quarterly data reported by the company within the most recent 12 months, which was C$1,416 Mil.

Agrium (TSX:AGU) Operating Income Explanation

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

Agrium's annualized ROC % for the quarter that ended in Sep. 2017 is calculated as:

	ROC % (Q: Sep. 2017 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2017 )	+	Invested Capital (Q: Sep. 2017 ))	/ count )
=	-98.232 * ( 1 - 31.68% )	/	( (17397.838	+	16394.921)	/ 2 )
=	-67.1121024	/	16896.3795
=	-0.40 %

where

	Invested Capital		(Q: Jun. 2017 )
=	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	))
=	23351.338	-	5529.39	-	( 424.11	-	max(0, 7237.798	-	9668.124	+	424.11	))
=	17397.838

	Invested Capital		(Q: Sep. 2017 )
=	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	))
=	20713.445	-	4016.461	-	( 302.063	-	max(0, 6407.182	-	8234.297	+	302.063	))
=	16394.921

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

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

Agrium's annualized ROC (Joel Greenblatt) % for the quarter that ended in Sep. 2017 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Sep. 2017 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Jun. 2017		Q: Sep. 2017
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	-103.144	/	( ( (9343.726 + max(3568.378, 0))	+	(8390.241 + max(3812.63, 0)) )	/	2 )
=	-103.144	/	( ( 12912.104	+	12202.871 )	/	2 )
=	-103.144	/	12557.4875
=	-0.82 %

where Working Capital is:

	Working Capital		(Q: Jun. 2017 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(5056.088	+	3783.757	+	321.74)	-	(5529.39	+	0	+	63.817)
=	3568.378

	Working Capital		(Q: Sep. 2017 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(4144.162	+	3262.53	+	488.705)	-	(4016.461	+	0	+	66.306)
=	3812.63

When net working capital is negative, 0 is used.

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

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

Agrium's Operating Margin % for the quarter that ended in Sep. 2017 is calculated as:

Operating Margin %	=	Operating Income (Q: Sep. 2017 )	/	Revenue (Q: Sep. 2017 )
	=	-24.558	/	2924.858
	=	-0.84 %

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.

Agrium Operating Income Related Terms

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Agrium (TSX:AGU) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Agriculture » Agrium Inc (TSX:AGU) » Definitions » Operating Income

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Address

Website

http://www.agrium.com

With more than 1,400 retail centers, Canada-based Agrium is the largest agricultural retailer in the United States, selling fertilizers, crop chemicals, and seed directly to farm customers. The company's wholesale business produces and markets the three main crop nutrients--nitrogen, potash, and phosphate--with natural resources located mainly in Canada and the United States. The bulk of Agrium's sales are generated in the U.S., Canada, and Australia.