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Apple Inc  (NAS:AAPL) Operating Margin %: 25.62% (As of Sep. 2018)

Operating Margin % is calculated as Operating Income divided by its Revenue. Apple Inc's Operating Income for the three months ended in Sep. 2018 was $16,118 Mil. Apple Inc's Revenue for the three months ended in Sep. 2018 was $62,900 Mil. Therefore, Apple Inc's Operating Margin % for the quarter that ended in Sep. 2018 was 25.62%.

Warning Sign:

Apple Inc operating margin has been in 5-year decline. The average rate of decline per year is -1.9%.

NAS:AAPL' s Operating Margin % Range Over the Past 10 Years
Min: 26.69   Max: 35.3
Current: 26.69

26.69
35.3

NAS:AAPL's Operating Margin % is ranked higher than
97% of the 2202 Companies
in the Global industry.

( Industry Median: 4.79 vs. NAS:AAPL: 26.69 )

Apple Inc's 5-Year Average operating margin Growth Rate was -1.90% per year.

Apple Inc's Operating Income for the three months ended in Sep. 2018 was $16,118 Mil. Its operating income for the trailing twelve months (TTM) ended in Sep. 2018 was $70,898 Mil.


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.

Apple Inc Annual Data

Sep09 Sep10 Sep11 Sep12 Sep13 Sep14 Sep15 Sep16 Sep17 Sep18
Operating Margin % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 28.72 30.48 27.84 26.76 26.69

Apple Inc Quarterly Data

Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18
Operating Margin % 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 24.95 29.76 26.00 23.68 25.62

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Apple Inc Distribution

* The bar in red indicates where Apple Inc's Operating Margin % falls into.



Calculation

Operating margin - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.

Apple Inc's Operating Margin for the fiscal year that ended in Sep. 2018 is calculated as

Operating Margin %=Operating Income (A: Sep. 2018 ) / Revenue (A: Sep. 2018 )
=70898 / 265595
=26.69 %

Apple Inc's Operating Margin for the quarter that ended in Sep. 2018 is calculated as

Operating Margin %=Operating Income (Q: Sep. 2018 ) / Revenue (Q: Sep. 2018 )
=16118 / 62900
=25.62 %

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


Explanation

Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.


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.


Related Terms


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