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Texas Instruments Operating Margin %

: 42.26% (As of Jun. 2019)
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Operating Margin % is calculated as Operating Income divided by its Revenue. Texas Instruments's Operating Income for the three months ended in Jun. 2019 was $1,550 Mil. Texas Instruments's Revenue for the three months ended in Jun. 2019 was $3,668 Mil. Therefore, Texas Instruments's Operating Margin % for the quarter that ended in Jun. 2019 was 42.26%.

Good Sign:

Texas Instruments Inc operating margin is expanding. Margin expansion is usually a good sign.

NAS:TXN' s Operating Margin % Range Over the Past 10 Years
Min: 20.95   Max: 44.56
Current: 43.43

20.95
44.56

NAS:TXN's Operating Margin % is ranked higher than
99% of the 836 Companies
in the Semiconductors industry.

( Industry Median: 5.64 vs. NAS:TXN: 43.43 )

Texas Instruments's 5-Year Average operating margin Growth Rate was 11.90% per year.

Texas Instruments's Operating Income for the three months ended in Jun. 2019 was $1,550 Mil. Its operating income for the trailing twelve months (TTM) ended in Jun. 2019 was $6,619 Mil.


Texas Instruments Operating Margin % 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.

Texas Instruments Annual Data
Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18
Operating Margin % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 32.40 35.23 38.59 42.86 44.56

Texas Instruments Quarterly Data
Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19
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 44.66 47.36 42.86 40.57 42.26

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.


Texas Instruments Operating Margin % Distribution

* The bar in red indicates where Texas Instruments's Operating Margin % falls into.



Texas Instruments Operating Margin % 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.

Texas Instruments's Operating Margin for the fiscal year that ended in Dec. 2018 is calculated as

Operating Margin %=Operating Income (A: Dec. 2018 ) / Revenue (A: Dec. 2018 )
=7034 / 15784
=44.56 %

Texas Instruments's Operating Margin for the quarter that ended in Jun. 2019 is calculated as

Operating Margin %=Operating Income (Q: Jun. 2019 ) / Revenue (Q: Jun. 2019 )
=1550 / 3668
=42.26 %

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


Texas Instruments  (NAS:TXN) Operating Margin % 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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