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Allegheny Technologies Inc (NYSE:ATI)
Gross Profit
$-32 Mil (TTM As of Sep. 2016)

Allegheny Technologies Inc's gross profit for the three months ended in Sep. 2016 was $50 Mil. Allegheny Technologies Inc's gross profit for the trailing twelve months (TTM) ended in Sep. 2016 was $-32 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Allegheny Technologies Inc's gross profit for the three months ended in Sep. 2016 was $50 Mil. Allegheny Technologies Inc's revenue for the three months ended in Sep. 2016 was $771 Mil. Therefore, Allegheny Technologies Inc's Gross Margin for the quarter that ended in Sep. 2016 was 6.52%.

Allegheny Technologies Inc had a gross margin of 6.52% for the quarter that ended in Sep. 2016 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of Allegheny Technologies Inc was 26.58%. The lowest was -1.05%. And the median was 13.39%.

Warning Sign:

Allegheny Technologies Inc gross margin has been in long term decline. The average rate of decline per year is -29.9%.


Definition

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

Allegheny Technologies Inc'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
=3719.6 - 3659.3
=60

Allegheny Technologies Inc's Gross Profit for the quarter that ended in Sep. 2016 is calculated as

Gross Profit (Q: Sep. 2016 )=Revenue - Cost of Goods Sold
=770.5 - 720.3
=50

Allegheny Technologies Inc Gross Profit for the trailing twelve months (TTM) ended in Sep. 2016 was -97.5 (Dec. 2015 ) + -33.2 (Mar. 2016 ) + 48.2 (Jun. 2016 ) + 50.2 (Sep. 2016 ) = $-32 Mil.

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

Allegheny Technologies Inc'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
=50 / 770.5
=6.52 %

* 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

Allegheny Technologies Inc had a gross margin of 6.52% for the quarter that ended in Sep. 2016 => No sustainable 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 local exchange's currency.

Allegheny Technologies Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Gross_Profit 1,1991,4491,15240849073762625337960

Allegheny Technologies Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
Gross_Profit 909712211077-29-98-334850
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