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Babcock & Wilcox Co (NYSE:BWC)
Gross Profit
$514 Mil (TTM As of Dec. 2014)

Babcock & Wilcox Co's gross profit for the three months ended in Dec. 2014 was $-3 Mil. Babcock & Wilcox Co's gross profit for the trailing twelve months (TTM) ended in Dec. 2014 was $514 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Babcock & Wilcox Co's gross profit for the three months ended in Dec. 2014 was $-3 Mil. Babcock & Wilcox Co's revenue for the three months ended in Dec. 2014 was $837 Mil. Therefore, Babcock & Wilcox Co's Gross Margin for the quarter that ended in Dec. 2014 was -0.36%.

Babcock & Wilcox Co had a gross margin of -0.36% for the quarter that ended in Dec. 2014 => No sustainable competitive advantage

During the past 7 years, the highest Gross Margin of Babcock & Wilcox Co was 29.60%. The lowest was 17.57%. And the median was 23.56%.


Definition

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

Babcock & Wilcox Co'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
=2923.019 - 2409.376
=514

Babcock & Wilcox Co's Gross Profit for the quarter that ended in Dec. 2014 is calculated as

Gross Profit (Q: Dec. 2014 )=Revenue - Cost of Goods Sold
=837.094 - 840.147
=-3

Babcock & Wilcox Co Gross Profit for the trailing twelve months (TTM) ended in Dec. 2014 was 159.71 (Mar. 2014 ) + 173.698 (Jun. 2014 ) + 183.288 (Sep. 2014 ) + -3.053 (Dec. 2014 ) = $514 Mil.

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

Babcock & Wilcox Co'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
=-3 / 837.094
=-0.36 %

* 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

Babcock & Wilcox Co had a gross margin of -0.36% for the quarter that ended in Dec. 2014 => No sustainable 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.

Babcock & Wilcox Co Annual Data

Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Gross_Profit 000721673665674830968514

Babcock & Wilcox Co Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
Gross_Profit 188244186200196385160174183-3
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