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Qualcomm Inc (NAS:QCOM)
Gross Profit
$15,802 Mil (TTM As of Sep. 2014)

Qualcomm Inc's gross profit for the three months ended in Sep. 2014 was $3,935 Mil. Qualcomm Inc's gross profit for the trailing twelve months (TTM) ended in Sep. 2014 was $15,802 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Qualcomm Inc's gross profit for the three months ended in Sep. 2014 was $3,935 Mil. Qualcomm Inc's revenue for the three months ended in Sep. 2014 was $6,692 Mil. Therefore, Qualcomm Inc's Gross Margin for the quarter that ended in Sep. 2014 was 58.80%.

Qualcomm Inc had a gross margin of 58.80% for the quarter that ended in Sep. 2014 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Qualcomm Inc was 71.01%. The lowest was 27.59%. And the median was 64.97%.

Warning Sign:

Qualcomm Inc gross margin has been in long term decline. The average rate of decline per year is -3.3%.


Definition

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

Qualcomm Inc's Gross Profit for the fiscal year that ended in Sep. 2014 is calculated as

Gross Profit (A: Sep. 2014 )=Revenue - Cost of Goods Sold
=26487 - 10686
=15,801

Qualcomm Inc's Gross Profit for the quarter that ended in Sep. 2014 is calculated as

Gross Profit (Q: Sep. 2014 )=Revenue - Cost of Goods Sold
=6692 - 2757
=3,935

Qualcomm Inc Gross Profit for the trailing twelve months (TTM) ended in Sep. 2014 was 3916 (Dec. 2013 ) + 3885 (Mar. 2014 ) + 4066 (Jun. 2014 ) + 3935 (Sep. 2014 ) = $15,802 Mil.

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

Qualcomm Inc's Gross Margin for the quarter that ended in Sep. 2014 is calculated as

Gross Margin (Q: Sep. 2014 )=Gross Profit (Q: Sep. 2014 ) / Revenue (Q: Sep. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=3,935 / 6692
=58.80 %

* 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

Qualcomm Inc had a gross margin of 58.80% for the quarter that ended in Sep. 2014 => 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.

Qualcomm Inc Annual Data

Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14
Gross_Profit 4,0285,3446,1907,7287,2357,47410,08012,02515,04615,801

Qualcomm Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Gross_Profit 2,9073,0293,7813,7523,7463,7673,9163,8854,0663,935
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