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Finisar Corp (NAS:FNSR)
Gross Profit
$355 Mil (TTM As of Apr. 2016)

Finisar Corp's gross profit for the three months ended in Apr. 2016 was $90 Mil. Finisar Corp's gross profit for the trailing twelve months (TTM) ended in Apr. 2016 was $355 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Finisar Corp's gross profit for the three months ended in Apr. 2016 was $90 Mil. Finisar Corp's revenue for the three months ended in Apr. 2016 was $319 Mil. Therefore, Finisar Corp's Gross Margin for the quarter that ended in Apr. 2016 was 28.37%.

Finisar Corp had a gross margin of 28.37% for the quarter that ended in Apr. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Finisar Corp was 34.32%. The lowest was 27.51%. And the median was 29.91%.

Warning Sign:

Finisar Corp gross margin has been in long term decline. The average rate of decline per year is -1.8%.


Definition

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

Finisar Corp's Gross Profit for the fiscal year that ended in Apr. 2016 is calculated as

Gross Profit (A: Apr. 2016 )=Revenue - Cost of Goods Sold
=1263.166 - 908.516
=355

Finisar Corp's Gross Profit for the quarter that ended in Apr. 2016 is calculated as

Gross Profit (Q: Apr. 2016 )=Revenue - Cost of Goods Sold
=318.794 - 228.352
=90

Finisar Corp Gross Profit for the trailing twelve months (TTM) ended in Apr. 2016 was 87.377 (Jul. 2015 ) + 89.091 (Oct. 2015 ) + 87.74 (Jan. 2016 ) + 90.442 (Apr. 2016 ) = $355 Mil.

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

Finisar Corp's Gross Margin for the quarter that ended in Apr. 2016 is calculated as

Gross Margin (Q: Apr. 2016 )=Gross Profit (Q: Apr. 2016 ) / Revenue (Q: Apr. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=90 / 318.794
=28.37 %

* 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

Finisar Corp had a gross margin of 28.37% for the quarter that ended in Apr. 2016 => 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.

Finisar Corp Annual Data

Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14Apr15Apr16
Gross_Profit 142142168180312273257397351355

Finisar Corp Quarterly Data

Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16
Gross_Profit 106979985788987898890
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