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Freeport-McMoRan Copper & Gold (NYSE:FCX)
Gross Profit
$6,284 Mil (TTM As of Dec. 2013)

Freeport-McMoRan Copper & Gold's gross profit for the three months ended in Dec. 2013 was $1,930 Mil. Freeport-McMoRan Copper & Gold's gross profit for the trailing twelve months (TTM) ended in Dec. 2013 was $6,284 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Freeport-McMoRan Copper & Gold's gross profit for the three months ended in Dec. 2013 was $1,930 Mil. Freeport-McMoRan Copper & Gold's revenue for the three months ended in Dec. 2013 was $5,885 Mil. Therefore, Freeport-McMoRan Copper & Gold's Gross Margin for the quarter that ended in Dec. 2013 was 32.80%.

Freeport-McMoRan Copper & Gold had a gross margin of 32.80% for the quarter that ended in Dec. 2013 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Freeport-McMoRan Copper & Gold was 60.61%. The lowest was 27.06%. And the median was 48.45%.


Definition

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

Freeport-McMoRan Copper & Gold'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
=20921 - 14637
=6,284

Freeport-McMoRan Copper & Gold's Gross Profit for the quarter that ended in Dec. 2013 is calculated as

Gross Profit (Q: Dec. 2013 )=Revenue - Cost of Goods Sold
=5885 - 3955
=1,930

Freeport-McMoRan Copper & Gold Gross Profit for the trailing twelve months (TTM) ended in Dec. 2013 was 1535 (Mar. 2013 ) + 905 (Jun. 2013 ) + 1914 (Sep. 2013 ) + 1930 (Dec. 2013 ) = $6,284 Mil.

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

Freeport-McMoRan Copper & Gold's Gross Margin for the quarter that ended in Dec. 2013 is calculated as

Gross Margin (Q: Dec. 2013 )=Gross Profit (Q: Dec. 2013 ) / Revenue (Q: Dec. 2013 )
=(Revenue - Cost of Goods Sold) / Revenue
=1,930 / 5885
=32.80 %

* 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

Freeport-McMoRan Copper & Gold had a gross margin of 32.80% for the quarter that ended in Dec. 2013 => 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.

Freeport-McMoRan Copper & Gold Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 9132,5333,2547,1664,8166,9919,6119,9606,4496,284

Freeport-McMoRan Copper & Gold Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Gross_Profit 2,3681,5021,9101,5621,5271,4501,5359051,9141,930
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