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SunPower Corporation (NAS:SPWR)
Gross Profit
$491 Mil (TTM As of Dec. 2013)

SunPower Corporation's gross profit for the three months ended in Dec. 2013 was $131 Mil. SunPower Corporation's gross profit for the trailing twelve months (TTM) ended in Dec. 2013 was $491 Mil.

Gross Margin is calculated as gross profit divided by its revenue. SunPower Corporation's gross profit for the three months ended in Dec. 2013 was $131 Mil. SunPower Corporation's revenue for the three months ended in Dec. 2013 was $638 Mil. Therefore, SunPower Corporation's Gross Margin for the quarter that ended in Dec. 2013 was 20.48%.

SunPower Corporation had a gross margin of 20.48% for the quarter that ended in Dec. 2013 => Competition eroding margins

During the past 13 years, the highest Gross Margin of SunPower Corporation was 24.32%. The lowest was -43.11%. And the median was 18.61%.

Warning Sign:

SunPower Corporation gross margin has been in long term decline. The average rate of decline per year is -10.2%.


Definition

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

SunPower Corporation'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
=2507.203 - 2016.131
=491

SunPower Corporation's Gross Profit for the quarter that ended in Dec. 2013 is calculated as

Gross Profit (Q: Dec. 2013 )=Revenue - Cost of Goods Sold
=638.134 - 507.466
=131

SunPower Corporation Gross Profit for the trailing twelve months (TTM) ended in Dec. 2013 was 59.313 (Mar. 2013 ) + 107.861 (Jun. 2013 ) + 193.23 (Sep. 2013 ) + 130.668 (Dec. 2013 ) = $491 Mil.

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

SunPower Corporation'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
=131 / 638.134
=20.48 %

* 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

SunPower Corporation had a gross margin of 20.48% 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.

SunPower Corporation Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit -5450148350284510226246491

SunPower Corporation Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Gross_Profit 76424574814759108193131
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