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Freeport-McMoRan Inc (NYSE:FCX)
Gross Profit
$-11,921 Mil (TTM As of Jun. 2016)

Freeport-McMoRan Inc's gross profit for the three months ended in Jun. 2016 was $-545 Mil. Freeport-McMoRan Inc's gross profit for the trailing twelve months (TTM) ended in Jun. 2016 was $-11,921 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. 2016 was $-545 Mil. Freeport-McMoRan Inc's revenue for the three months ended in Jun. 2016 was $3,334 Mil. Therefore, Freeport-McMoRan Inc's Gross Margin for the quarter that ended in Jun. 2016 was -16.35%.

Freeport-McMoRan Inc had a gross margin of -16.35% for the quarter that ended in Jun. 2016 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of Freeport-McMoRan Inc was 56.19%. The lowest was -83.15%. And the median was 39.06%.


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. 2015 is calculated as

Gross Profit (A: Dec. 2015 )=Revenue - Cost of Goods Sold
=15877 - 28524
=-12,647

Freeport-McMoRan Inc's Gross Profit for the quarter that ended in Jun. 2016 is calculated as

Gross Profit (Q: Jun. 2016 )=Revenue - Cost of Goods Sold
=3334 - 3879
=-545

Freeport-McMoRan Inc Gross Profit for the trailing twelve months (TTM) ended in Jun. 2016 was -3752 (Sep. 2015 ) + -3917 (Dec. 2015 ) + -3707 (Mar. 2016 ) + -545 (Jun. 2016 ) = $-11,921 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. 2016 is calculated as

Gross Margin (Q: Jun. 2016 )=Gross Profit (Q: Jun. 2016 ) / Revenue (Q: Jun. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=-545 / 3334
=-16.35 %

* 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 -16.35% for the quarter that ended in Jun. 2016 => No sustainable competitive advantage


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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Gross_Profit 3,2547,1664,8166,9019,6119,9606,4496,2841,934-12,647

Freeport-McMoRan Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
Gross_Profit 1,2821,4271,291-2,066-2,802-2,232-3,752-3,917-3,707-545
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