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GuruFocus has detected 7 Warning Signs with Boston Properties Inc $BXP.
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Boston Properties Inc (NYSE:BXP)
Gross Profit
$1,630 Mil (TTM As of Dec. 2016)

Boston Properties Inc's gross profit for the three months ended in Dec. 2016 was $404 Mil. Boston Properties Inc's gross profit for the trailing twelve months (TTM) ended in Dec. 2016 was $1,630 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Boston Properties Inc's gross profit for the three months ended in Dec. 2016 was $404 Mil. Boston Properties Inc's revenue for the three months ended in Dec. 2016 was $636 Mil. Therefore, Boston Properties Inc's Gross Margin for the quarter that ended in Dec. 2016 was 63.55%.

Boston Properties Inc had a gross margin of 63.55% for the quarter that ended in Dec. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Boston Properties Inc was 67.37%. The lowest was 63.69%. And the median was 64.59%.


Definition

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

Boston Properties Inc's Gross Profit for the fiscal year that ended in Dec. 2016 is calculated as

Gross Profit (A: Dec. 2016 )=Revenue - Cost of Goods Sold
=2550.82 - 921.234
=1,630

Boston Properties Inc's Gross Profit for the quarter that ended in Dec. 2016 is calculated as

Gross Profit (Q: Dec. 2016 )=Revenue - Cost of Goods Sold
=636.061 - 231.834
=404

Boston Properties Inc Gross Profit for the trailing twelve months (TTM) ended in Dec. 2016 was 439.179 (Mar. 2016 ) + 397.63 (Jun. 2016 ) + 388.55 (Sep. 2016 ) + 404.227 (Dec. 2016 ) = $1,630 Mil.

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

Boston Properties Inc's Gross Margin for the quarter that ended in Dec. 2016 is calculated as

Gross Margin (Q: Dec. 2016 )=Gross Profit (Q: Dec. 2016 ) / Revenue (Q: Dec. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=404 / 636.061
=63.55 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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

Boston Properties Inc had a gross margin of 63.55% for the quarter that ended in Dec. 2016 => 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 local exchange's currency.

Boston Properties Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Gross_Profit 9999739921,0201,1241,1801,3641,5321,5861,630

Boston Properties Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
Gross_Profit 396395390395402400439398389404
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