Ikanos Communications (FRA:I9J1) Operating Income : €-37.37 Mil (TTM As of Jun. 2015)

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What is Ikanos Communications Operating Income?

Ikanos Communications's Operating Income for the three months ended in Jun. 2015 was €-10.55 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Jun. 2015 was €-37.37 Mil.

Warning Sign:

Ikanos Communications Inc had operating loss over the past 3 years.

Operating Margin % is calculated as Operating Income divided by its Revenue. Ikanos Communications's Operating Income for the three months ended in Jun. 2015 was €-10.55 Mil. Ikanos Communications's Revenue for the three months ended in Jun. 2015 was €9.86 Mil. Therefore, Ikanos Communications's Operating Margin % for the quarter that ended in Jun. 2015 was -107.00%.

Good Sign:

Ikanos Communications Inc operating margin is expanding. Margin expansion is usually a good sign.

Ikanos Communications's 5-Year average Growth Rate for Operating Margin % was 23.20% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. Ikanos Communications's annualized ROC % for the quarter that ended in Jun. 2015 was -210.42%. Ikanos Communications's annualized ROC (Joel Greenblatt) % for the quarter that ended in Jun. 2015 was -300.84%.

Ikanos Communications Operating Income Historical Data

The historical data trend for Ikanos Communications'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.

Ikanos Communications Operating Income Chart

Ikanos Communications Annual Data

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Operating Income

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-37.95

-5.57

-12.55

-21.33

-34.45

Ikanos Communications Quarterly Data
	Sep10	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14	Mar15	Jun15
Operating Income	Get a 7-Day Free Trial															-8.86	-7.74	-8.15	-10.93	-10.55

Ikanos Communications 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 Jun. 2015 adds up the quarterly data reported by the company within the most recent 12 months, which was €-37.37 Mil.

Ikanos Communications (FRA:I9J1) Operating Income Explanation

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

Ikanos Communications's annualized ROC % for the quarter that ended in Jun. 2015 is calculated as:

	ROC % (Q: Jun. 2015 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2015 )	+	Invested Capital (Q: Jun. 2015 ))	/ count )
=	-42.208 * ( 1 - -0.78% )	/	( (20.47	+	19.96)	/ 2 )
=	-42.5372224	/	20.215
=	-210.42 %

where

	Invested Capital		(Q: Mar. 2015 )
=	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	))
=	41.719	-	11.107	-	( 11.98	-	max(0, 16.708	-	26.85	+	11.98	))
=	20.47

	Invested Capital		(Q: Jun. 2015 )
=	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	))
=	41.478	-	12.596	-	( 14.285	-	max(0, 18.331	-	27.253	+	14.285	))
=	19.96

Note: The Operating Income data used here is four times the quarterly (Jun. 2015) data.

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

Ikanos Communications's annualized ROC (Joel Greenblatt) % for the quarter that ended in Jun. 2015 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Jun. 2015 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Mar. 2015		Q: Jun. 2015
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	-42.208	/	( ( (12.851 + max(2.782, 0))	+	(12.427 + max(-0.927, 0)) )	/	2 )
=	-42.208	/	( ( 15.633	+	12.427 )	/	2 )
=	-42.208	/	14.03
=	-300.84 %

where Working Capital is:

	Working Capital		(Q: Mar. 2015 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(10.5	+	1.956	+	2.414)	-	(11.107	+	0.98	+	0.00099999999999767)
=	2.782

	Working Capital		(Q: Jun. 2015 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(9.592	+	1.774	+	1.602)	-	(12.596	+	1.299	+	0)
=	-0.927

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Jun. 2015) EBIT data.

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

Ikanos Communications's Operating Margin % for the quarter that ended in Jun. 2015 is calculated as:

Operating Margin %	=	Operating Income (Q: Jun. 2015 )	/	Revenue (Q: Jun. 2015 )
	=	-10.552	/	9.862
	=	-107.00 %

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.

Ikanos Communications Operating Income Related Terms

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

Ikanos Communications (FRA:I9J1) Business Description

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http://www.ikanos.com

Ikanos Communications Inc was incorporated in the State of California in April 1999 and reincorporated in the State of Delaware in September 2005. The Company is a provider of advanced broadband semiconductor products and software for delivering high speed broadband solutions to the digital home. The Company's broadband multi-mode and digital subscriber line processors and other semiconductor offerings power carrier infrastructure and customer premise equipment for network equipment manufacturers who, in turn, serve telecommunications service providers. The Company has developed programmable, scalable chip architectures, which form the foundation for deploying and delivering multi-play services. This communications processor architecture with wire-speed packet processing capabilities enables high-performance end user devices capable of distributing advanced services in the home. These products support telecommunications services providers' multi-play deployment plans to the digital home while keeping their capital and operating expenditures low and have been deployed by service providers in Asia, Europe, and North and South America. The Company outsources all of its semiconductor fabrication, assembly, and test functions, which allows focusing on the design, development, sales, and marketing of its products and reduces the level of its capital investment. It offers multiple product lines that are designed to address different segments of the communications processor and the high-speed broadband DSL markets. The Company currently competes or expects to compete with, among others, Alcatel-Lucent, Broadcom Corporation, Cavium, Inc., Cortina Systems, Inc., Lantiq Deutschland GmbH, Marvell Technology Group Ltd., M/A-COM Technology Solutions Holdings, Inc., PMC-Sierra, Inc., Metanoia Communication, QUALCOMM Incorporated, Realtek Semiconductor Corp., and MediaTek Inc. As of December 29, 2013, the Company had over 285 patents issued in the United States and more than 35 companion patents issued in foreign jurisdictions.

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