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Life Technologies (FRA:IVN) Operating Income : €519 Mil (TTM As of Sep. 2013)


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What is Life Technologies Operating Income?

Life Technologies's Operating Income for the three months ended in Sep. 2013 was €124 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Sep. 2013 was €519 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Life Technologies's Operating Income for the three months ended in Sep. 2013 was €124 Mil. Life Technologies's Revenue for the three months ended in Sep. 2013 was €699 Mil. Therefore, Life Technologies's Operating Margin % for the quarter that ended in Sep. 2013 was 17.77%.

Life Technologies's 5-Year average Growth Rate for Operating Margin % was 0.00% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. Life Technologies's annualized ROC % for the quarter that ended in Sep. 2013 was 7.55%. Life Technologies's annualized ROC (Joel Greenblatt) % for the quarter that ended in Sep. 2013 was 46.48%.


Life Technologies Operating Income Historical Data

The historical data trend for Life Technologies'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.

Life Technologies Operating Income Chart

Life Technologies Annual Data
Trend Dec03 Dec04 Dec05 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12
Operating Income
Get a 7-Day Free Trial Premium Member Only Premium Member Only 123.58 264.71 462.97 492.30 506.91

Life Technologies Quarterly Data
Dec08 Mar09 Jun09 Sep09 Dec09 Mar10 Jun10 Sep10 Dec10 Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13
Operating Income Get a 7-Day Free Trial 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 87.33 130.25 141.02 123.59 124.29

Life Technologies 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 Sep. 2013 adds up the quarterly data reported by the company within the most recent 12 months, which was €519 Mil.

* 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.


Life Technologies  (FRA:IVN) Operating Income Explanation

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

Life Technologies's annualized ROC % for the quarter that ended in Sep. 2013 is calculated as:

ROC % (Q: Sep. 2013 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Jun. 2013 ) + Invested Capital (Q: Sep. 2013 ))/ count )
=497.164 * ( 1 - 12.15% )/( (5845.927 + 5721.856)/ 2 )
=436.758574/5783.8915
=7.55 %

where

Invested Capital(Q: Jun. 2013 )
=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))
=6430.68 - 375.559 - ( 209.194 - max(0, 708.156 - 1275.575+209.194))
=5845.927

Invested Capital(Q: Sep. 2013 )
=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))
=6349.201 - 362.413 - ( 264.932 - max(0, 599.375 - 1306.095+264.932))
=5721.856

Note: The Operating Income data used here is four times the quarterly (Sep. 2013) data.

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

Life Technologies's annualized ROC (Joel Greenblatt) % for the quarter that ended in Sep. 2013 is calculated as:

ROC (Joel Greenblatt) %(Q: Sep. 2013 )
=EBIT/Average of (Net fixed Assets + Net Working Capital)
=EBIT/Average of (Property, Plant and Equipment+Net Working Capital)
     Q: Jun. 2013  Q: Sep. 2013
=EBIT/( ( (Property, Plant and Equipment + Net Working Capital) + (Property, Plant and Equipment + Net Working Capital) )/ count )
=482.856/( ( (584.334 + max(469.809, 0)) + (578.736 + max(444.897, 0)) )/ 2 )
=482.856/( ( 1054.143 + 1023.633 )/ 2 )
=482.856/1038.888
=46.48 %

where Working Capital is:

Working Capital(Q: Jun. 2013 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(512.2 + 315.959 + 238.222) - (375.559 + 207.096 + 13.917)
=469.809

Working Capital(Q: Sep. 2013 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(488.837 + 322.455 + 229.871) - (362.413 + 233.852 + 0.00099999999997635)
=444.897

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Sep. 2013) EBIT data.

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

Life Technologies's Operating Margin % for the quarter that ended in Sep. 2013 is calculated as:

Operating Margin %=Operating Income (Q: Sep. 2013 )/Revenue (Q: Sep. 2013 )
=124.291/699.447
=17.77 %

* 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.

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.


Life Technologies Operating Income Related Terms

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Life Technologies (FRA:IVN) Business Description

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Life Technologies Corp began operations as a California partnership in 1987 and incorporated in California in 1989. In 1997, the Company reincorporated as a Delaware corporation. On November 21, 2008, Invitrogen Corporation, a predecessor company to Life Technologies, completed the acquisition of Applied Biosystems, Inc. to form a new company called Life Technologies Corporation. The Company is a global life sciences company dedicated to improving the human condition. The Company's systems, consumables and services enable researchers and commercial markets to accelerate scientific exploration, to discoveries and developments that better the quality of life. The Company's products are also used in forensics, food and water testing and other industrial applications. The Company delivers a range of products and services, including systems, instruments, reagents, software, and custom services. Its growing portfolio of products includes innovative technologies for capillary electrophoresis-based sequencing, next generation sequencing, PCR, sample preparation, cell culture, RNA interference analysis, functional genomics research, proteomics and cell biology applications, as well as clinical diagnostic applications, forensics and animal, food, pharmaceutical and water testing analysis. The Company also provides its customers convenient and value-added purchasing options through thousands of sales and service professionals, e-commerce capabilities and onsite supply center solutions. The Company operates is business under three divisions: Molecular Biology Systems ('MBS'), Cell Systems ('CS'), and Genetic Systems ('GS'). The MBS division includes the molecular biology-based technologies, including basic and real-time PCR, RNAi, DNA synthesis, sample prep, transfection, cloning and protein expression profiling, protein analysis and thermo-cycler instrumentation. The CS division includes all product lines used in the study of cell function, including cell culture media and sera, stem cells and related tools, cellular imaging products, antibodies, drug discovery services and cell therapy related products. The GS division includes capillary electrophoresis systems and reagents and next generation sequencing systems and reagents, including the SOLiDTM and Ion TorrentTM systems, as well as reagent kits developed specifically for applied markets, such as forensics and food safety, animal health and pharmaceutical quality monitoring. The Company offers many different products and services and is continually developing and/or acquiring others. Some of its specific product categories include the following: 'High-throughput' gene cloning and expression technology; Pre-cast electrophoresis products; Antibodies; Magnetic beads; Molecular Probes fluorescence-based technologies; Transfection reagents; PCR and Real Time PCR systems and reagents; and RNA Interference reagents. The Company's manufacturing operations require a variety of raw materials, elec

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