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Lamar Advertising Co (NAS:LAMR)
Gross Profit
$809 Mil (TTM As of Dec. 2013)

Lamar Advertising Co's gross profit for the three months ended in Dec. 2013 was $205 Mil. Lamar Advertising Co's gross profit for the trailing twelve months (TTM) ended in Dec. 2013 was $809 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Lamar Advertising Co's gross profit for the three months ended in Dec. 2013 was $205 Mil. Lamar Advertising Co's revenue for the three months ended in Dec. 2013 was $314 Mil. Therefore, Lamar Advertising Co's Gross Margin for the quarter that ended in Dec. 2013 was 65.04%.

Lamar Advertising Co had a gross margin of 65.04% for the quarter that ended in Dec. 2013 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Lamar Advertising Co was 100.00%. The lowest was 62.34%. And the median was 65.58%.


Definition

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

Lamar Advertising Co'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
=1245.842 - 436.844
=809

Lamar Advertising Co's Gross Profit for the quarter that ended in Dec. 2013 is calculated as

Gross Profit (Q: Dec. 2013 )=Revenue - Cost of Goods Sold
=314.495 - 109.962
=205

Lamar Advertising Co Gross Profit for the trailing twelve months (TTM) ended in Dec. 2013 was 176.96 (Mar. 2013 ) + 213.961 (Jun. 2013 ) + 213.544 (Sep. 2013 ) + 204.533 (Dec. 2013 ) = $809 Mil.

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

Lamar Advertising Co'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
=205 / 314.495
=65.04 %

* 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

Lamar Advertising Co had a gross margin of 65.04% for the quarter that ended in Dec. 2013 => Durable 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.

Lamar Advertising Co Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 581669730801761658694724761809

Lamar Advertising Co Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Gross_Profit 194185163200202196177214214205
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