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Diamond Foods Inc  (NAS:DMND) Operating Margin %: 8.18% (As of Oct. 2015)

Operating Margin % is calculated as Operating Income divided by its Revenue. Diamond Foods Inc's Operating Income for the three months ended in Oct. 2015 was $18.4 Mil. Diamond Foods Inc's Revenue for the three months ended in Oct. 2015 was $224.8 Mil. Therefore, Diamond Foods Inc's Operating Margin % for the quarter that ended in Oct. 2015 was 8.18%.



Diamond Foods Inc's 5-Year Average operating margin Growth Rate was 0.00% per year.

Diamond Foods Inc's Operating Income for the three months ended in Oct. 2015 was $18.4 Mil. Its operating income for the trailing twelve months (TTM) ended in Oct. 2015 was $75.4 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.

Diamond Foods Inc Annual Data

Jul06 Jul07 Jul08 Jul09 Jul10 Jul11 Jul12 Jul13 Jul14 Jul15
Operating Margin % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 5.54 -5.16 -13.69 -3.16 8.79

Diamond Foods Inc Quarterly Data

Jan11 Apr11 Jul11 Oct11 Jan12 Apr12 Jul12 Oct12 Jan13 Apr13 Jul13 Oct13 Jan14 Apr14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15
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 7.70 9.42 9.10 9.12 8.18

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.


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.

Diamond Foods Inc's Operating Margin for the fiscal year that ended in Jul. 2015 is calculated as

Operating Margin %=Operating Income (A: Jul. 2015 ) / Revenue (A: Jul. 2015 )
=75.974 / 864.165
=8.79 %

Diamond Foods Inc's Operating Margin for the quarter that ended in Oct. 2015 is calculated as

Operating Margin %=Operating Income (Q: Oct. 2015 ) / Revenue (Q: Oct. 2015 )
=18.386 / 224.849
=8.18 %

* 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.


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