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GuruFocus has detected 3 Warning Signs with Noble Corp PLC \$NE.
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Noble Corp PLC (NYSE:NE)
Gross Profit
\$1,377 Mil (TTM As of Dec. 2016)

Noble Corp PLC's gross profit for the three months ended in Dec. 2016 was \$227 Mil. Noble Corp PLC's gross profit for the trailing twelve months (TTM) ended in Dec. 2016 was \$1,377 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Noble Corp PLC's gross profit for the three months ended in Dec. 2016 was \$227 Mil. Noble Corp PLC's revenue for the three months ended in Dec. 2016 was \$410 Mil. Therefore, Noble Corp PLC's Gross Margin for the quarter that ended in Dec. 2016 was 55.42%.

Noble Corp PLC had a gross margin of 55.42% for the quarter that ended in Dec. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Noble Corp PLC was 69.49%. The lowest was 45.23%. And the median was 57.48%.

Definition

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

Noble Corp PLC's Gross Profit for the fiscal year that ended in Dec. 2016 is calculated as

 Gross Profit (A: Dec. 2016 ) = Revenue - Cost of Goods Sold = 2302.065 - 924.937 = 1,377

Noble Corp PLC's Gross Profit for the quarter that ended in Dec. 2016 is calculated as

 Gross Profit (Q: Dec. 2016 ) = Revenue - Cost of Goods Sold = 410.156 - 182.863 = 227

Noble Corp PLC Gross Profit for the trailing twelve months (TTM) ended in Dec. 2016 was 344.719 (Mar. 2016 ) + 636.309 (Jun. 2016 ) + 168.807 (Sep. 2016 ) + 227.293 (Dec. 2016 ) = \$1,377 Mil.

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

Noble Corp PLC's Gross Margin for the quarter that ended in Dec. 2016 is calculated as

 Gross Margin (Q: Dec. 2016 ) = Gross Profit (Q: Dec. 2016 ) / Revenue (Q: Dec. 2016 ) = (Revenue - Cost of Goods Sold) / Revenue = 227 / 410.156 = 55.42 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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

Noble Corp PLC had a gross margin of 55.42% for the quarter that ended in Dec. 2016 => Durable competitive advantage

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Noble Corp PLC Annual Data

 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Gross_Profit 1,866 2,313 2,530 1,548 1,219 1,630 2,098 1,666 2,049 1,377

Noble Corp PLC Quarterly Data

 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Gross_Profit 429 400 462 457 586 544 345 636 169 227
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