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Plum Creek Timber Co Inc (NYSE:PCL)
Gross Profit
$395 Mil (TTM As of Mar. 2014)

Plum Creek Timber Co Inc's gross profit for the three months ended in Mar. 2014 was $85 Mil. Plum Creek Timber Co Inc's gross profit for the trailing twelve months (TTM) ended in Mar. 2014 was $395 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Plum Creek Timber Co Inc's gross profit for the three months ended in Mar. 2014 was $85 Mil. Plum Creek Timber Co Inc's revenue for the three months ended in Mar. 2014 was $317 Mil. Therefore, Plum Creek Timber Co Inc's Gross Margin for the quarter that ended in Mar. 2014 was 26.81%.

Plum Creek Timber Co Inc had a gross margin of 26.81% for the quarter that ended in Mar. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Plum Creek Timber Co Inc was 86.07%. The lowest was 28.31%. And the median was 34.22%.


Definition

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

Plum Creek Timber Co 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
=1340 - 920
=420

Plum Creek Timber Co Inc's Gross Profit for the quarter that ended in Mar. 2014 is calculated as

Gross Profit (Q: Mar. 2014 )=Revenue - Cost of Goods Sold
=317 - 232
=85

Plum Creek Timber Co Inc Gross Profit for the trailing twelve months (TTM) ended in Mar. 2014 was 90 (Jun. 2013 ) + 122 (Sep. 2013 ) + 98 (Dec. 2013 ) + 85 (Mar. 2014 ) = $395 Mil.

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

Plum Creek Timber Co Inc's Gross Margin for the quarter that ended in Mar. 2014 is calculated as

Gross Margin (Q: Mar. 2014 )=Gross Profit (Q: Mar. 2014 ) / Revenue (Q: Mar. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=85 / 317
=26.81 %

* 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

Plum Creek Timber Co Inc had a gross margin of 26.81% for the quarter that ended in Mar. 2014 => 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.

Plum Creek Timber Co Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 558540556551457405383378396420

Plum Creek Timber Co Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Gross_Profit 7881110127110901229885109
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