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Owens-Illinois Inc (NYSE:OI)
Gross Profit
$1,110 Mil (TTM As of Dec. 2015)

Owens-Illinois Inc's gross profit for the three months ended in Dec. 2015 was $292 Mil. Owens-Illinois Inc's gross profit for the trailing twelve months (TTM) ended in Dec. 2015 was $1,110 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Owens-Illinois Inc's gross profit for the three months ended in Dec. 2015 was $292 Mil. Owens-Illinois Inc's revenue for the three months ended in Dec. 2015 was $1,626 Mil. Therefore, Owens-Illinois Inc's Gross Margin for the quarter that ended in Dec. 2015 was 17.96%.

Owens-Illinois Inc had a gross margin of 17.96% for the quarter that ended in Dec. 2015 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of Owens-Illinois Inc was 21.26%. The lowest was 17.79%. And the median was 19.37%.

Warning Sign:

Owens-Illinois Inc gross margin has been in long term decline. The average rate of decline per year is -2%.


Definition

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

Owens-Illinois Inc's Gross Profit for the fiscal year that ended in Dec. 2015 is calculated as

Gross Profit (A: Dec. 2015 )=Revenue - Cost of Goods Sold
=6156 - 5046
=1,110

Owens-Illinois Inc's Gross Profit for the quarter that ended in Dec. 2015 is calculated as

Gross Profit (Q: Dec. 2015 )=Revenue - Cost of Goods Sold
=1626 - 1334
=292

Owens-Illinois Inc Gross Profit for the trailing twelve months (TTM) ended in Dec. 2015 was 268 (Mar. 2015 ) + 274 (Jun. 2015 ) + 276 (Sep. 2015 ) + 292 (Dec. 2015 ) = $1,110 Mil.

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

Owens-Illinois Inc's Gross Margin for the quarter that ended in Dec. 2015 is calculated as

Gross Margin (Q: Dec. 2015 )=Gross Profit (Q: Dec. 2015 ) / Revenue (Q: Dec. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=292 / 1626
=17.96 %

* 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

Owens-Illinois Inc had a gross margin of 17.96% for the quarter that ended in Dec. 2015 => 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.

Owens-Illinois Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Gross_Profit 1,1861,5951,6771,3351,3501,3891,3741,3311,2531,110

Owens-Illinois Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
Gross_Profit 352291321358337237268274276292
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