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AbbVie Inc (NYSE:ABBV)
Gross Profit
$16,169 Mil (TTM As of Mar. 2015)

AbbVie Inc's gross profit for the three months ended in Mar. 2015 was $4,098 Mil. AbbVie Inc's gross profit for the trailing twelve months (TTM) ended in Mar. 2015 was $16,169 Mil.

Gross Margin is calculated as gross profit divided by its revenue. AbbVie Inc's gross profit for the three months ended in Mar. 2015 was $4,098 Mil. AbbVie Inc's revenue for the three months ended in Mar. 2015 was $5,040 Mil. Therefore, AbbVie Inc's Gross Margin for the quarter that ended in Mar. 2015 was 81.31%.

AbbVie Inc had a gross margin of 81.31% for the quarter that ended in Mar. 2015 => Durable competitive advantage

During the past 6 years, the highest Gross Margin of AbbVie Inc was 77.83%. The lowest was 71.46%. And the median was 74.44%.


Definition

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

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

Gross Profit (A: Dec. 2014 )=Revenue - Cost of Goods Sold
=19960 - 4426
=15,534

AbbVie Inc's Gross Profit for the quarter that ended in Mar. 2015 is calculated as

Gross Profit (Q: Mar. 2015 )=Revenue - Cost of Goods Sold
=5040 - 942
=4,098

AbbVie Inc Gross Profit for the trailing twelve months (TTM) ended in Mar. 2015 was 3813 (Jun. 2014 ) + 3925 (Sep. 2014 ) + 4333 (Dec. 2014 ) + 4098 (Mar. 2015 ) = $16,169 Mil.

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

AbbVie Inc's Gross Margin for the quarter that ended in Mar. 2015 is calculated as

Gross Margin (Q: Mar. 2015 )=Gross Profit (Q: Mar. 2015 ) / Revenue (Q: Mar. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=4,098 / 5040
=81.31 %

* 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

AbbVie Inc had a gross margin of 81.31% for the quarter that ended in Mar. 2015 => 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.

AbbVie Inc Annual Data

Dec09Dec10Dec11Dec12Dec13Dec14
Gross_Profit 000010,15811,34512,80513,87214,20915,534

AbbVie Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
Gross_Profit 3,9413,1763,6383,5663,8293,4633,8133,9254,3334,098
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