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Allergan PLC (NYSE:AGN)
Gross Profit
$12,542 Mil (TTM As of Mar. 2016)

Allergan PLC's gross profit for the three months ended in Mar. 2016 was $2,984 Mil. Allergan PLC's gross profit for the trailing twelve months (TTM) ended in Mar. 2016 was $12,542 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Allergan PLC's gross profit for the three months ended in Mar. 2016 was $2,984 Mil. Allergan PLC's revenue for the three months ended in Mar. 2016 was $3,796 Mil. Therefore, Allergan PLC's Gross Margin for the quarter that ended in Mar. 2016 was 78.61%.

Allergan PLC had a gross margin of 78.61% for the quarter that ended in Mar. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Allergan PLC was 68.08%. The lowest was 37.68%. And the median was 43.40%.


Definition

Gross Profit is the different between the sale prices and the cost of buying or producing the goods.

Allergan PLC's Gross Profit for the fiscal year that ended in Dec. 2015 is calculated as

Gross Profit (A: Dec. 2015 )=Revenue - Cost of Goods Sold
=15071 - 4810.4
=10,261

Allergan PLC's Gross Profit for the quarter that ended in Mar. 2016 is calculated as

Gross Profit (Q: Mar. 2016 )=Revenue - Cost of Goods Sold
=3795.9 - 811.8
=2,984

Allergan PLC Gross Profit for the trailing twelve months (TTM) ended in Mar. 2016 was 3624.9 (Jun. 2015 ) + 2846 (Sep. 2015 ) + 3087 (Dec. 2015 ) + 2984.1 (Mar. 2016 ) = $12,542 Mil.

Gross Profit is the numerator in the calculation of Gross Margin:

Allergan PLC's Gross Margin for the quarter that ended in Mar. 2016 is calculated as

Gross Margin (Q: Mar. 2016 )=Gross Profit (Q: Mar. 2016 ) / Revenue (Q: Mar. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=2,984 / 3795.9
=78.61 %

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.


Explanation

Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.

Durable competitive advantage creates a high Gross Margin because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin

1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key

Allergan PLC had a gross margin of 78.61% for the quarter that ended in Mar. 2016 => Durable competitive advantage


Related Terms

Cost of Goods Sold, Gross Margin, Revenue


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Allergan PLC Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Gross_Profit 7469921,0331,1961,5682,0202,5253,9876,75910,261

Allergan PLC Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
Gross_Profit -1,7201,3621,3719681,3331,5433,6252,8463,0872,984
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