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Freeport-McMoRan Inc (NYSE:FCX)
Gross Profit
$6,553 Mil (TTM As of Jun. 2014)

Freeport-McMoRan Inc's gross profit for the three months ended in Jun. 2014 was $1,427 Mil. Freeport-McMoRan Inc's gross profit for the trailing twelve months (TTM) ended in Jun. 2014 was $6,553 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Freeport-McMoRan Inc's gross profit for the three months ended in Jun. 2014 was $1,427 Mil. Freeport-McMoRan Inc's revenue for the three months ended in Jun. 2014 was $5,522 Mil. Therefore, Freeport-McMoRan Inc's Gross Margin for the quarter that ended in Jun. 2014 was 25.84%.

Freeport-McMoRan Inc had a gross margin of 25.84% for the quarter that ended in Jun. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Freeport-McMoRan Inc 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 Inc'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 Inc's Gross Profit for the quarter that ended in Jun. 2014 is calculated as

Gross Profit (Q: Jun. 2014 )=Revenue - Cost of Goods Sold
=5522 - 4095
=1,427

Freeport-McMoRan Inc Gross Profit for the trailing twelve months (TTM) ended in Jun. 2014 was 1914 (Sep. 2013 ) + 1930 (Dec. 2013 ) + 1282 (Mar. 2014 ) + 1427 (Jun. 2014 ) = $6,553 Mil.

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

Freeport-McMoRan Inc'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
=1,427 / 5522
=25.84 %

* 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 Inc had a gross margin of 25.84% 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.

Freeport-McMoRan Inc Annual Data

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

Freeport-McMoRan Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Gross_Profit 1,5621,5271,4501,5359051,9141,9301,2821,4271,291
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