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Atwood Oceanics Inc (NYSE:ATW)
Gross Profit
$789 Mil (TTM As of Mar. 2016)

Atwood Oceanics Inc's gross profit for the three months ended in Mar. 2016 was $197 Mil. Atwood Oceanics Inc's gross profit for the trailing twelve months (TTM) ended in Mar. 2016 was $789 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Atwood Oceanics Inc's gross profit for the three months ended in Mar. 2016 was $197 Mil. Atwood Oceanics Inc's revenue for the three months ended in Mar. 2016 was $296 Mil. Therefore, Atwood Oceanics Inc's Gross Margin for the quarter that ended in Mar. 2016 was 66.58%.

Atwood Oceanics Inc had a gross margin of 66.58% for the quarter that ended in Mar. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Atwood Oceanics Inc was 65.34%. The lowest was 47.81%. And the median was 57.88%.

Warning Sign:

Atwood Oceanics Inc gross margin has been in long term decline. The average rate of decline per year is -2.2%.


Definition

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

Atwood Oceanics Inc's Gross Profit for the fiscal year that ended in Sep. 2015 is calculated as

Gross Profit (A: Sep. 2015 )=Revenue - Cost of Goods Sold
=1395.851 - 559.165
=837

Atwood Oceanics Inc's Gross Profit for the quarter that ended in Mar. 2016 is calculated as

Gross Profit (Q: Mar. 2016 )=Revenue - Cost of Goods Sold
=296.351 - 99.041
=197

Atwood Oceanics Inc Gross Profit for the trailing twelve months (TTM) ended in Mar. 2016 was 187.238 (Jun. 2015 ) + 235.492 (Sep. 2015 ) + 168.881 (Dec. 2015 ) + 197.31 (Mar. 2016 ) = $789 Mil.

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

Atwood Oceanics Inc'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
=197 / 296.351
=66.58 %

* 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

Atwood Oceanics Inc had a gross margin of 66.58% 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.

Atwood Oceanics Inc Annual Data

Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15
Gross_Profit 132216310365398422440605612837

Atwood Oceanics Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
Gross_Profit 153127141191203211187235169197
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