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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

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

 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Gross_Profit 0 0 0 721 673 656 568 830 968 514

Babcock & Wilcox Co Quarterly Data

 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Gross_Profit 204 191 186 200 196 385 160 174 183 -3
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