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Fabrinet (NYSE:FN)
Gross Profit
$119.5 Mil (TTM As of Jun. 2016)

Fabrinet's gross profit for the three months ended in Jun. 2016 was $33.8 Mil. Fabrinet's gross profit for the trailing twelve months (TTM) ended in Jun. 2016 was $119.5 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Fabrinet's gross profit for the three months ended in Jun. 2016 was $33.8 Mil. Fabrinet's revenue for the three months ended in Jun. 2016 was $276.4 Mil. Therefore, Fabrinet's Gross Margin for the quarter that ended in Jun. 2016 was 12.24%.

Fabrinet had a gross margin of 12.24% for the quarter that ended in Jun. 2016 => No sustainable competitive advantage

During the past 11 years, the highest Gross Margin of Fabrinet was 14.57%. The lowest was 10.82%. And the median was 12.48%.


Definition

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

Fabrinet's Gross Profit for the fiscal year that ended in Jun. 2016 is calculated as

Gross Profit (A: Jun. 2016 )=Revenue - Cost of Goods Sold
=976.747 - 857.224
=119.5

Fabrinet's Gross Profit for the quarter that ended in Jun. 2016 is calculated as

Gross Profit (Q: Jun. 2016 )=Revenue - Cost of Goods Sold
=276.388 - 242.546
=33.8

Fabrinet Gross Profit for the trailing twelve months (TTM) ended in Jun. 2016 was 26.011 (Sep. 2015 ) + 28.493 (Dec. 2015 ) + 31.177 (Mar. 2016 ) + 33.842 (Jun. 2016 ) = $119.5 Mil.

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

Fabrinet'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
=33.8 / 276.388
=12.24 %

* 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

Fabrinet had a gross margin of 12.24% 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.

Fabrinet Annual Data

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
Gross_Profit 72.368.358.064.394.761.969.474.287.8119.5

Fabrinet Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
Gross_Profit 17.317.820.521.121.724.526.028.531.233.8
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