Sumitomo Heavy Industries (STU:SSM1) Operating Income : €486 Mil (TTM As of Mar. 2024)

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What is Sumitomo Heavy Industries Operating Income?

Sumitomo Heavy Industries's Operating Income for the three months ended in Mar. 2024 was €113 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Mar. 2024 was €486 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Sumitomo Heavy Industries's Operating Income for the three months ended in Mar. 2024 was €113 Mil. Sumitomo Heavy Industries's Revenue for the three months ended in Mar. 2024 was €1,565 Mil. Therefore, Sumitomo Heavy Industries's Operating Margin % for the quarter that ended in Mar. 2024 was 7.23%.

Warning Sign:

Sumitomo Heavy Industries Ltd operating margin has been in a 5-year decline. The average rate of decline per year is -5.2%.

Sumitomo Heavy Industries's 5-Year average Growth Rate for Operating Margin % was -5.20% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. Sumitomo Heavy Industries's annualized ROC % for the quarter that ended in Mar. 2024 was 5.84%. Sumitomo Heavy Industries's annualized ROC (Joel Greenblatt) % for the quarter that ended in Mar. 2024 was 11.47%.

Sumitomo Heavy Industries Operating Income Historical Data

The historical data trend for Sumitomo Heavy Industries'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.

Sumitomo Heavy Industries Operating Income Chart

Sumitomo Heavy Industries Annual Data

Trend

Mar14

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Mar22

Dec23

Operating Income

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599.14

477.48

396.77

502.93

473.63

Sumitomo Heavy Industries 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															112.90	94.67	120.91	156.90	113.20

Sumitomo Heavy Industries 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 €486 Mil.

Sumitomo Heavy Industries (STU:SSM1) Operating Income Explanation

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

Sumitomo Heavy Industries'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 )
=	452.796 * ( 1 - 24.96% )	/	( (5742.158	+	5901.375)	/ 2 )
=	339.7781184	/	5821.7665
=	5.84 %

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	))
=	7648.107	-	1240.669	-	( 665.28	-	max(0, 2651.547	-	4765.733	+	665.28	))
=	5742.158

	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	))
=	7700.955	-	1072.539	-	( 727.041	-	max(0, 2735.813	-	4850.23	+	727.041	))
=	5901.375

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

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

Sumitomo Heavy Industries'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 )
=	477.332	/	( ( (2101.773 + max(1977.516, 0))	+	(2091.997 + max(2152.453, 0)) )	/	2 )
=	477.332	/	( ( 4079.289	+	4244.45 )	/	2 )
=	477.332	/	4161.8695
=	11.47 %

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)
=	(1846.088	+	2044.956	+	209.409)	-	(1240.669	+	0	+	882.268)
=	1977.516

	Working Capital		(Q: Mar. 2024 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(1764.019	+	2134.27	+	224.9)	-	(1072.539	+	0	+	898.197)
=	2152.453

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 %:

Sumitomo Heavy Industries'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 )
	=	113.199	/	1564.733
	=	7.23 %

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.

Sumitomo Heavy Industries Operating Income Related Terms

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Sumitomo Heavy Industries (STU:SSM1) Business Description

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GURUFOCUS.COM » STOCK LIST » Industrials » Industrial Products » Sumitomo Heavy Industries Ltd (STU:SSM1) » Definitions » Operating Income

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SOHVY:USA 6302:Japan

Address

ThinkPark Tower, 1-1 Osaki 2-chome, Shinagawa-ku, Tokyo, JPN, 141-6025

Website

http://www.shi.co.jp

Sumitomo Heavy Industries Ltd develops and manufactures a range of industrial machinery, from gearboxes to ships and large-scale plants. It offers power transmission and control systems, molding machinery, mobile cranes, turbines, and other industrial systems to optimize production. The company has six operating segments: machinery components, precision machinery, construction machinery, industrial machinery, ships, and environmental facilities and plants. Its segments collaborate, utilize research and development, and look for synergies to create new technologies or build on existing components. Japan accounts for approximately half of total revenue, with the remainder split between the United States, China, and other areas.

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