Switch to:
GuruFocus has detected 5 Warning Signs with Enterprise Products Partners LP \$EPD.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Enterprise Products Partners LP (NYSE:EPD)
Gross Profit
\$3,379 Mil (TTM As of Dec. 2016)

Enterprise Products Partners LP's gross profit for the three months ended in Dec. 2016 was \$870 Mil. Enterprise Products Partners LP's gross profit for the trailing twelve months (TTM) ended in Dec. 2016 was \$3,379 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Enterprise Products Partners LP's gross profit for the three months ended in Dec. 2016 was \$870 Mil. Enterprise Products Partners LP's revenue for the three months ended in Dec. 2016 was \$6,479 Mil. Therefore, Enterprise Products Partners LP's Gross Margin for the quarter that ended in Dec. 2016 was 13.43%.

Enterprise Products Partners LP had a gross margin of 13.43% for the quarter that ended in Dec. 2016 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of Enterprise Products Partners LP was 14.68%. The lowest was 5.55%. And the median was 7.47%.

Definition

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

Enterprise Products Partners LP's Gross Profit for the fiscal year that ended in Dec. 2016 is calculated as

 Gross Profit (A: Dec. 2016 ) = Revenue - Cost of Goods Sold = 23022.3 - 19643.5 = 3,379

Enterprise Products Partners LP's Gross Profit for the quarter that ended in Dec. 2016 is calculated as

 Gross Profit (Q: Dec. 2016 ) = Revenue - Cost of Goods Sold = 6478.8 - 5608.7 = 870

Enterprise Products Partners LP Gross Profit for the trailing twelve months (TTM) ended in Dec. 2016 was 858.4 (Mar. 2016 ) + 795.6 (Jun. 2016 ) + 854.7 (Sep. 2016 ) + 870.1 (Dec. 2016 ) = \$3,379 Mil.

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

Enterprise Products Partners LP's Gross Margin for the quarter that ended in Dec. 2016 is calculated as

 Gross Margin (Q: Dec. 2016 ) = Gross Profit (Q: Dec. 2016 ) / Revenue (Q: Dec. 2016 ) = (Revenue - Cost of Goods Sold) / Revenue = 870 / 6478.8 = 13.43 %

* 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

Enterprise Products Partners LP had a gross margin of 13.43% for the quarter that ended in Dec. 2016 => No sustainable 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.

Enterprise Products Partners LP Annual Data

 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Gross_Profit 941 1,445 1,945 2,290 2,995 4,323 3,488 3,731 3,359 3,379

Enterprise Products Partners LP Quarterly Data

 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Gross_Profit 915 904 856 735 855 913 858 796 855 870
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to \$400 per referral. ( Learn More)