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Chicago Bridge & Iron Company (NYSE:CBI)
Gross Profit
$1,466 Mil (TTM As of Dec. 2014)

Chicago Bridge & Iron Company's gross profit for the three months ended in Dec. 2014 was $391 Mil. Chicago Bridge & Iron Company's gross profit for the trailing twelve months (TTM) ended in Dec. 2014 was $1,466 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Chicago Bridge & Iron Company's gross profit for the three months ended in Dec. 2014 was $391 Mil. Chicago Bridge & Iron Company's revenue for the three months ended in Dec. 2014 was $3,372 Mil. Therefore, Chicago Bridge & Iron Company's Gross Margin for the quarter that ended in Dec. 2014 was 11.59%.

Chicago Bridge & Iron Company had a gross margin of 11.59% for the quarter that ended in Dec. 2014 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of Chicago Bridge & Iron Company was 13.96%. The lowest was 3.92%. And the median was 11.60%.

Warning Sign:

Chicago Bridge & Iron Company gross margin has been in long term decline. The average rate of decline per year is -2.1%.


Definition

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

Chicago Bridge & Iron Company's Gross Profit for the fiscal year that ended in Dec. 2014 is calculated as

Gross Profit (A: Dec. 2014 )=Revenue - Cost of Goods Sold
=12974.93 - 11508.521
=1,466

Chicago Bridge & Iron Company's Gross Profit for the quarter that ended in Dec. 2014 is calculated as

Gross Profit (Q: Dec. 2014 )=Revenue - Cost of Goods Sold
=3371.686 - 2981.048
=391

Chicago Bridge & Iron Company Gross Profit for the trailing twelve months (TTM) ended in Dec. 2014 was 301.402 (Mar. 2014 ) + 381.175 (Jun. 2014 ) + 393.194 (Sep. 2014 ) + 390.638 (Dec. 2014 ) = $1,466 Mil.

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

Chicago Bridge & Iron Company's Gross Margin for the quarter that ended in Dec. 2014 is calculated as

Gross Margin (Q: Dec. 2014 )=Gross Profit (Q: Dec. 2014 ) / Revenue (Q: Dec. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=391 / 3371.686
=11.59 %

* 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

Chicago Bridge & Iron Company had a gross margin of 11.59% for the quarter that ended in Dec. 2014 => 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 own currency.

Chicago Bridge & Iron Company Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Gross_Profit 1482823572335234925706991,1991,466

Chicago Bridge & Iron Company Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
Gross_Profit 189198246297317339301381393391
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