Avery Dennison (Avery Dennison) Operating Income : $1,023 Mil (TTM As of Mar. 2024)

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What is Avery Dennison Operating Income?

Avery Dennison's Operating Income for the three months ended in Mar. 2024 was $267 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Mar. 2024 was $1,023 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Avery Dennison's Operating Income for the three months ended in Mar. 2024 was $267 Mil. Avery Dennison's Revenue for the three months ended in Mar. 2024 was $2,151 Mil. Therefore, Avery Dennison's Operating Margin % for the quarter that ended in Mar. 2024 was 12.41%.

Good Sign:

Avery Dennison Corp operating margin is expanding. Margin expansion is usually a good sign.

Avery Dennison's 5-Year average Growth Rate for Operating Margin % was 0.90% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. Avery Dennison's annualized ROC % for the quarter that ended in Mar. 2024 was 11.39%. Avery Dennison's annualized ROC (Joel Greenblatt) % for the quarter that ended in Mar. 2024 was 49.03%.

Avery Dennison Operating Income Historical Data

The historical data trend for Avery Dennison'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.

Avery Dennison Operating Income Chart

Avery Dennison Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Operating Income

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823.70

862.80

1,064.30

1,073.40

963.80

Avery Dennison Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
Operating Income	Get a 7-Day Free Trial															207.90	233.80	253.20	268.90	267.00

Avery Dennison 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 Mar. 2024 adds up the quarterly data reported by the company within the most recent 12 months, which was $1,023 Mil.

Avery Dennison (NYSE:AVY) Operating Income Explanation

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

Avery Dennison's annualized ROC % for the quarter that ended in Mar. 2024 is calculated as:

	ROC % (Q: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	1068 * ( 1 - 26.45% )	/	( (6422.8	+	7375.1)	/ 2 )
=	785.514	/	6898.95
=	11.39 %

where

	Invested Capital		(Q: Dec. 2023 )
=	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	))
=	8209.8	-	1690.5	-	( 215	-	max(0, 2699.5	-	2796	+	215	))
=	6422.8

	Invested Capital		(Q: Mar. 2024 )
=	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	))
=	8255.2	-	1301.5	-	( 185.7	-	max(0, 3308.2	-	2886.8	+	185.7	))
=	7375.1

Note: The Operating Income data used here is four times the quarterly (Mar. 2024) data.

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

Avery Dennison's annualized ROC (Joel Greenblatt) % for the quarter that ended in Mar. 2024 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Mar. 2024 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Dec. 2023		Q: Mar. 2024
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	1052	/	( ( (1625.8 + max(503.7, 0))	+	(1598.2 + max(563.4, 0)) )	/	2 )
=	1052	/	( ( 2129.5	+	2161.6 )	/	2 )
=	1052	/	2145.55
=	49.03 %

where Working Capital is:

	Working Capital		(Q: Dec. 2023 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(1414.9	+	920.7	+	245.4)	-	(1690.5	+	0	+	386.8)
=	503.7

	Working Capital		(Q: Mar. 2024 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(1478	+	972.5	+	250.6)	-	(1301.5	+	0	+	836.2)
=	563.4

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Mar. 2024) EBIT data.

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

Avery Dennison's Operating Margin % for the quarter that ended in Mar. 2024 is calculated as:

Operating Margin %	=	Operating Income (Q: Mar. 2024 )	/	Revenue (Q: Mar. 2024 )
	=	267	/	2151.3
	=	12.41 %

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.

Avery Dennison Operating Income Related Terms

Thank you for viewing the detailed overview of Avery Dennison's Operating Income provided by GuruFocus.com. Please click on the following links to see related term pages.

Avery Dennison (Avery Dennison) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Packaging & Containers » Avery Dennison Corp (NYSE:AVY) » Definitions » Operating Income

Comparable Companies

Traded in Other Exchanges

AV3:Germany AVY:Argentina

Address

8080 Norton Parkway, Mentor, OH, USA, 44060

Website

https://www.averydennison.com

Avery Dennison manufactures pressure-sensitive materials, merchandise tags, and labels. The company also runs a specialty converting business that produces radio-frequency identification, or RFID, inlays and labels. Avery Dennison draws a significant amount of revenue from outside the United States, with international operations accounting for the majority of total sales.

Executives

Ignacio J Walker	officer: VP and Chief Legal Officer	207 GOODE AVE, GLENDALE CA 91203
Divina Fe Santiago	officer: VP Controller	8080 NORTON PARKWAY, MENTOR OH 44060
Julia A Stewart	director	4551 WEST 107TH STREET STE 100, C/O APPLEBEES INTERNATIONAL INC, OVERLAND PARK KS 66207
Francisco Melo	officer: President, Solutions Group	8080 NORTON PARKWAY, MENTOR OH 44060
Hassan Rmaile	officer: President, Materials Group	1200 WILLOW LAKE BLVD, P.O. BOX 64683, ST. PAUL MN 55110
Andres Alberto Lopez	director	ONE MICHAEL OWENS WAY, PERRYSBURG OH 43551
Francesca Reverberi	director	C/O TRINSEO S.A., 1000 CHESTERBROOK BLVD., SUITE 300, BERWYN PA 19312
Anthony Anderson	director	1100 N. WOOD DALE ROAD, WOOD DALE IL 60191
Martha N. Sullivan	director	529 PLEASANT STREET, MS B-7, ATTLEBORO MA 02703
William Raymond Wagner	director	C/O VOCUS, INC., 4296 FORBES BOULEVARD, LANHAM MD 20706
Bradley A Alford	director	150 N ORANGE GROVE BLVD, PASADENA CA 91103
Deena Baker-nel	officer: VP & Chief HR Officer	207 GOODE AVE, GLENDALE CA 91203
Gregory Lovins	officer: V.P. and Interim CFO	207 GOODE AVENUE, GLENDALE CA 91203
Ken C Hicks	director	150 N. ORANGE GROVE BLVD, PASADENA CA 91103
Nicholas Colisto	officer: VP & Chief Information Officer	C/O AVERY DENNISON CORPORATION, 207 GOODE AVE, GLENDALE CA 91203