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ARRIS International PLC (NAS:ARRS)
Gross Profit
$1,547 Mil (TTM As of Jun. 2016)

ARRIS International PLC's gross profit for the three months ended in Jun. 2016 was $445 Mil. ARRIS International PLC's gross profit for the trailing twelve months (TTM) ended in Jun. 2016 was $1,547 Mil.

Gross Margin is calculated as gross profit divided by its revenue. ARRIS International PLC's gross profit for the three months ended in Jun. 2016 was $445 Mil. ARRIS International PLC's revenue for the three months ended in Jun. 2016 was $1,730 Mil. Therefore, ARRIS International PLC's Gross Margin for the quarter that ended in Jun. 2016 was 25.71%.

ARRIS International PLC had a gross margin of 25.71% for the quarter that ended in Jun. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of ARRIS International PLC was 41.77%. The lowest was 27.29%. And the median was 31.95%.

Warning Sign:

ARRIS International PLC gross margin has been in long term decline. The average rate of decline per year is -6.3%.


Definition

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

ARRIS International 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
=4798.332 - 3379.409
=1,419

ARRIS International PLC's Gross Profit for the quarter that ended in Jun. 2016 is calculated as

Gross Profit (Q: Jun. 2016 )=Revenue - Cost of Goods Sold
=1730.044 - 1285.31
=445

ARRIS International PLC Gross Profit for the trailing twelve months (TTM) ended in Jun. 2016 was 359.333 (Sep. 2015 ) + 358.673 (Dec. 2015 ) + 384.032 (Mar. 2016 ) + 444.734 (Jun. 2016 ) = $1,547 Mil.

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

ARRIS International PLC's Gross Margin for the quarter that ended in Jun. 2016 is calculated as

Gross Margin (Q: Jun. 2016 )=Gross Profit (Q: Jun. 2016 ) / Revenue (Q: Jun. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=445 / 1730.044
=25.71 %

* 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

ARRIS International PLC had a gross margin of 25.71% for the quarter that ended in Jun. 2016 => Competition eroding margins


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.

ARRIS International PLC Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Gross_Profit 2522743934634244114631,0231,5821,419

ARRIS International PLC Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
Gross_Profit 347419436381337364359359384445
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