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Alkermes PLC (NAS:ALKS)
Gross Profit
\$489.3 Mil (TTM As of Sep. 2016)

Alkermes PLC's gross profit for the six months ended in Sep. 2016 was \$144.8 Mil. Alkermes PLC's gross profit for the trailing twelve months (TTM) ended in Sep. 2016 was \$489.3 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Alkermes PLC's gross profit for the six months ended in Sep. 2016 was \$144.8 Mil. Alkermes PLC's revenue for the six months ended in Sep. 2016 was \$180.2 Mil. Therefore, Alkermes PLC's Gross Margin for the quarter that ended in Sep. 2016 was 80.33%.

Alkermes PLC had a gross margin of 80.33% for the quarter that ended in Sep. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Alkermes PLC was 86.72%. The lowest was 67.29%. And the median was 75.08%.

Definition

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

Alkermes 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 = 628.335 - 138.989 = 489.3

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

 Gross Profit (Q: Sep. 2016 ) = Revenue - Cost of Goods Sold = 180.241 - 35.456 = 144.8

For company reported semi-annually, GuruFocus uses latest annual data as the TTM data. Alkermes PLC Gross Profit for the trailing twelve months (TTM) ended in Sep. 2016 was \$489.3 Mil.

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

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

 Gross Margin (Q: Sep. 2016 ) = Gross Profit (Q: Sep. 2016 ) / Revenue (Q: Sep. 2016 ) = (Revenue - Cost of Goods Sold) / Revenue = 144.8 / 180.241 = 80.33 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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

Alkermes PLC had a gross margin of 80.33% for the quarter that ended in Sep. 2016 => Durable competitive advantage

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Alkermes PLC Annual Data

 Mar06 Mar07 Mar08 Mar09 Mar10 Mar11 Mar12 Mar13 Dec14 Dec15 Gross_Profit 143.1 194.8 200.0 283.4 128.8 134.5 262.4 405.1 443.0 489.3

Alkermes PLC Semi-Annual Data

 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Gross_Profit 110.1 112.7 128.8 121.2 121.0 118.8 128.3 129.1 161.2 144.8
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