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GuruFocus has detected 4 Warning Signs with Carnival Corp \$CCL.
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Carnival Corp (NYSE:CCL)
Gross Profit
\$7,005 Mil (TTM As of Nov. 2016)

Carnival Corp's gross profit for the three months ended in Nov. 2016 was \$1,616 Mil. Carnival Corp's gross profit for the trailing twelve months (TTM) ended in Nov. 2016 was \$7,005 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Carnival Corp's gross profit for the three months ended in Nov. 2016 was \$1,616 Mil. Carnival Corp's revenue for the three months ended in Nov. 2016 was \$3,935 Mil. Therefore, Carnival Corp's Gross Margin for the quarter that ended in Nov. 2016 was 41.07%.

Carnival Corp had a gross margin of 41.07% for the quarter that ended in Nov. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Carnival Corp was 42.75%. The lowest was 31.13%. And the median was 37.35%.

Definition

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

Carnival Corp's Gross Profit for the fiscal year that ended in Nov. 2016 is calculated as

 Gross Profit (A: Nov. 2016 ) = Revenue - Cost of Goods Sold = 16389 - 9383 = 7,006

Carnival Corp's Gross Profit for the quarter that ended in Nov. 2016 is calculated as

 Gross Profit (Q: Nov. 2016 ) = Revenue - Cost of Goods Sold = 3935 - 2319 = 1,616

Carnival Corp Gross Profit for the trailing twelve months (TTM) ended in Nov. 2016 was 1408 (Feb. 2016 ) + 1447 (May. 2016 ) + 2534 (Aug. 2016 ) + 1616 (Nov. 2016 ) = \$7,005 Mil.

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

Carnival Corp's Gross Margin for the quarter that ended in Nov. 2016 is calculated as

 Gross Margin (Q: Nov. 2016 ) = Gross Profit (Q: Nov. 2016 ) / Revenue (Q: Nov. 2016 ) = (Revenue - Cost of Goods Sold) / Revenue = 1,616 / 3935 = 41.07 %

* 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

Carnival Corp had a gross margin of 41.07% for the quarter that ended in Nov. 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.

Carnival Corp Annual Data

 Nov07 Nov08 Nov09 Nov10 Nov11 Nov12 Nov13 Nov14 Nov15 Nov16 Gross_Profit 5,405 5,607 5,053 5,377 5,494 5,062 4,811 5,463 6,267 7,006

Carnival Corp Quarterly Data

 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 Gross_Profit 1,221 1,196 1,186 2,393 1,493 1,408 1,447 2,534 1,616 1,356
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