Covidien (FRA:6COP) Operating Margin % : 24.13% (As of Dec. 2014)

Covidien Operating Margin % Chart

Covidien Annual Data
	Trend	Sep05	Sep06	Sep07	Sep08	Sep09	Sep10	Sep11	Sep12	Sep13	Sep14
Operating Margin %		Get a 7-Day Free Trial					19.78	20.52	21.17	20.83	18.69

Covidien Quarterly Data
	Mar10	Jun10	Sep10	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14
Operating Margin %	Get a 7-Day Free Trial															20.12	22.40	13.62	18.76	24.13

Competitive Comparison of Covidien's Operating Margin %

For the Medical Instruments & Supplies subindustry, Covidien's Operating Margin %, along with its competitors' market caps and Operating Margin % data, can be viewed below:

* 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. Note that "N/A" values will not show up in the chart.

Covidien's Operating Margin % Distribution in the Medical Devices & Instruments Industry

For the Medical Devices & Instruments industry and Healthcare sector, Covidien's Operating Margin % distribution charts can be found below:

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

Covidien 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.

Covidien's Operating Margin % for the fiscal year that ended in Sep. 2014 is calculated as

Covidien's Operating Margin % for the quarter that ended in Dec. 2014 is calculated as

* 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.

Covidien  (FRA:6COP) 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

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 (Diluted) 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.

Covidien Operating Margin % Related Terms

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Covidien (FRA:6COP) Business Description