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Landstar System, Inc. (NAS:LSTR)
Gross Profit
$596 Mil (TTM As of Dec. 2013)

Landstar System, Inc.'s gross profit for the three months ended in Dec. 2013 was $141 Mil. Landstar System, Inc.'s gross profit for the trailing twelve months (TTM) ended in Dec. 2013 was $596 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Landstar System, Inc.'s gross profit for the three months ended in Dec. 2013 was $141 Mil. Landstar System, Inc.'s revenue for the three months ended in Dec. 2013 was $677 Mil. Therefore, Landstar System, Inc.'s Gross Margin for the quarter that ended in Dec. 2013 was 20.83%.

Landstar System, Inc. had a gross margin of 20.83% for the quarter that ended in Dec. 2013 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Landstar System, Inc. was 28.25%. The lowest was 8.50%. And the median was 13.54%.

Warning Sign:

Landstar System, Inc. gross margin has been in long term decline. The average rate of decline per year is -2.1%.


Definition

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

Landstar System, 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
=2666.255 - 2046.927
=619

Landstar System, Inc.'s Gross Profit for the quarter that ended in Dec. 2013 is calculated as

Gross Profit (Q: Dec. 2013 )=Revenue - Cost of Goods Sold
=676.962 - 535.943
=141

Landstar System, Inc. Gross Profit for the trailing twelve months (TTM) ended in Dec. 2013 was 140.284 (Mar. 2013 ) + 151.439 (Jun. 2013 ) + 162.932 (Sep. 2013 ) + 141.019 (Dec. 2013 ) = $596 Mil.

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

Landstar System, Inc.'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
=141 / 676.962
=20.83 %

* 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

Landstar System, Inc. had a gross margin of 20.83% for the quarter that ended in Dec. 2013 => 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.

Landstar System, Inc. Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 250347338658649552528601642619

Landstar System, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Gross_Profit 157162145164169143140151163141
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