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Directv (NAS:DTV)
Gross Profit
\$15,625 Mil (TTM As of Mar. 2015)

Directv's gross profit for the three months ended in Mar. 2015 was \$3,869 Mil. Directv's gross profit for the trailing twelve months (TTM) ended in Mar. 2015 was \$15,625 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Directv's gross profit for the three months ended in Mar. 2015 was \$3,869 Mil. Directv's revenue for the three months ended in Mar. 2015 was \$8,143 Mil. Therefore, Directv's Gross Margin for the quarter that ended in Mar. 2015 was 47.51%.

Directv had a gross margin of 47.51% for the quarter that ended in Mar. 2015 => Durable competitive advantage

Definition

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

Directv'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 = 33260 - 17680 = 15,580

Directv's Gross Profit for the quarter that ended in Mar. 2015 is calculated as

 Gross Profit (Q: Mar. 2015 ) = Revenue - Cost of Goods Sold = 8143 - 4274 = 3,869

Directv Gross Profit for the trailing twelve months (TTM) ended in Mar. 2015 was 3930 (Jun. 2014 ) + 3926 (Sep. 2014 ) + 3900 (Dec. 2014 ) + 3869 (Mar. 2015 ) = \$15,625 Mil.

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

Directv's Gross Margin for the quarter that ended in Mar. 2015 is calculated as

 Gross Margin (Q: Mar. 2015 ) = Gross Profit (Q: Mar. 2015 ) / Revenue (Q: Mar. 2015 ) = (Revenue - Cost of Goods Sold) / Revenue = 3,869 / 8143 = 47.51 %

* 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

Directv had a gross margin of 47.51% for the quarter that ended in Mar. 2015 => Durable competitive advantage

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Directv Annual Data

 Dec05 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Gross_Profit 7,680 7,158 8,337 9,745 10,635 11,997 13,271 14,161 15,112 15,580

Directv Quarterly Data

 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Gross_Profit 3,626 3,737 3,774 3,758 3,843 3,824 3,930 3,926 3,900 3,869
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