Switch to:
Eaton Corp PLC (NYSE:ETN)
Gross Profit
$6,746 Mil (TTM As of Jun. 2014)

Eaton Corp PLC's gross profit for the three months ended in Jun. 2014 was $1,742 Mil. Eaton Corp PLC's gross profit for the trailing twelve months (TTM) ended in Jun. 2014 was $6,746 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Eaton Corp PLC's gross profit for the three months ended in Jun. 2014 was $1,742 Mil. Eaton Corp PLC's revenue for the three months ended in Jun. 2014 was $5,767 Mil. Therefore, Eaton Corp PLC's Gross Margin for the quarter that ended in Jun. 2014 was 30.21%.

Eaton Corp PLC had a gross margin of 30.21% for the quarter that ended in Jun. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Eaton Corp PLC was 33.69%. The lowest was 24.61%. And the median was 29.76%.


Definition

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

Eaton Corp PLC's Gross Profit for the fiscal year that ended in Dec. 2013 is calculated as

Gross Profit (A: Dec. 2013 )=Revenue - Cost of Goods Sold
=22046 - 15369
=6,677

Eaton Corp PLC's Gross Profit for the quarter that ended in Jun. 2014 is calculated as

Gross Profit (Q: Jun. 2014 )=Revenue - Cost of Goods Sold
=5767 - 4025
=1,742

Eaton Corp PLC Gross Profit for the trailing twelve months (TTM) ended in Jun. 2014 was 1724 (Sep. 2013 ) + 1646 (Dec. 2013 ) + 1634 (Mar. 2014 ) + 1742 (Jun. 2014 ) = $6,746 Mil.

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

Eaton Corp PLC's Gross Margin for the quarter that ended in Jun. 2014 is calculated as

Gross Margin (Q: Jun. 2014 )=Gross Profit (Q: Jun. 2014 ) / Revenue (Q: Jun. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=1,742 / 5767
=30.21 %

* 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

Eaton Corp PLC had a gross margin of 30.21% for the quarter that ended in Jun. 2014 => Competition eroding margins


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.

Eaton Corp PLC Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 2,7103,0443,2833,6514,1853,0914,0824,7884,8636,677

Eaton Corp PLC Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Gross_Profit 1,2061,2531,2031,2011,5751,7321,7241,6461,6341,742
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)
Free 7-day Trial
FEEDBACK
Email Hide