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Alpha Natural Resources Inc (NYSE:ANR)
Gross Profit
\$358 Mil (TTM As of Dec. 2014)

Alpha Natural Resources Inc's gross profit for the three months ended in Dec. 2014 was \$133 Mil. Alpha Natural Resources Inc's gross profit for the trailing twelve months (TTM) ended in Dec. 2014 was \$358 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Alpha Natural Resources Inc's gross profit for the three months ended in Dec. 2014 was \$133 Mil. Alpha Natural Resources Inc's revenue for the three months ended in Dec. 2014 was \$1,071 Mil. Therefore, Alpha Natural Resources Inc's Gross Margin for the quarter that ended in Dec. 2014 was 12.43%.

Alpha Natural Resources Inc had a gross margin of 12.43% for the quarter that ended in Dec. 2014 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of Alpha Natural Resources Inc was 28.91%. The lowest was 5.04%. And the median was 19.71%.

Warning Sign:

Alpha Natural Resources Inc gross margin has been in long term decline. The average rate of decline per year is -26.4%.

Definition

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

Alpha Natural Resources 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 = 4287.078 - 3929.328 = 358

Alpha Natural Resources Inc's Gross Profit for the quarter that ended in Dec. 2014 is calculated as

 Gross Profit (Q: Dec. 2014 ) = Revenue - Cost of Goods Sold = 1070.615 - 937.569 = 133

Alpha Natural Resources Inc Gross Profit for the trailing twelve months (TTM) ended in Dec. 2014 was 65.793 (Mar. 2014 ) + 103.121 (Jun. 2014 ) + 55.79 (Sep. 2014 ) + 133.046 (Dec. 2014 ) = \$358 Mil.

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

Alpha Natural Resources Inc's Gross Margin for the quarter that ended in Dec. 2014 is calculated as

 Gross Margin (Q: Dec. 2014 ) = Gross Profit (Q: Dec. 2014 ) / Revenue (Q: Dec. 2014 ) = (Revenue - Cost of Goods Sold) / Revenue = 133 / 1070.615 = 12.43 %

* 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

Alpha Natural Resources Inc had a gross margin of 12.43% for the quarter that ended in Dec. 2014 => No sustainable competitive advantage

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Alpha Natural Resources Inc Annual Data

 Dec05 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Gross_Profit 381 359 358 469 689 952 1,222 1,163 249 358

Alpha Natural Resources Inc Quarterly Data

 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Gross_Profit 207 468 158 71 -55 76 66 103 56 133
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