Switch to:
GuruFocus has detected 5 Warning Signs with Ensco PLC \$ESV.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Ensco PLC (NYSE:ESV)
Gross Profit
\$1,673 Mil (TTM As of Sep. 2016)

Ensco PLC's gross profit for the three months ended in Sep. 2016 was \$250 Mil. Ensco PLC's gross profit for the trailing twelve months (TTM) ended in Sep. 2016 was \$1,673 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Ensco PLC's gross profit for the three months ended in Sep. 2016 was \$250 Mil. Ensco PLC's revenue for the three months ended in Sep. 2016 was \$548 Mil. Therefore, Ensco PLC's Gross Margin for the quarter that ended in Sep. 2016 was 45.62%.

Ensco PLC had a gross margin of 45.62% for the quarter that ended in Sep. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Ensco PLC was 68.58%. The lowest was 48.20%. And the median was 55.33%.

Definition

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

Ensco PLC's Gross Profit for the fiscal year that ended in Dec. 2015 is calculated as

 Gross Profit (A: Dec. 2015 ) = Revenue - Cost of Goods Sold = 4063.4 - 1869.6 = 2,194

Ensco PLC's Gross Profit for the quarter that ended in Sep. 2016 is calculated as

 Gross Profit (Q: Sep. 2016 ) = Revenue - Cost of Goods Sold = 548.2 - 298.1 = 250

Ensco PLC Gross Profit for the trailing twelve months (TTM) ended in Sep. 2016 was 413.1 (Dec. 2015 ) + 450.3 (Mar. 2016 ) + 559.4 (Jun. 2016 ) + 250.1 (Sep. 2016 ) = \$1,673 Mil.

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

Ensco PLC's Gross Margin for the quarter that ended in Sep. 2016 is calculated as

 Gross Margin (Q: Sep. 2016 ) = Gross Profit (Q: Sep. 2016 ) / Revenue (Q: Sep. 2016 ) = (Revenue - Cost of Goods Sold) / Revenue = 250 / 548.2 = 45.62 %

* 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

Ensco PLC had a gross margin of 45.62% for the quarter that ended in Sep. 2016 => Durable competitive advantage

Related Terms

Historical Data

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

Ensco PLC Annual Data

 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Gross_Profit 1,205 1,417 1,642 1,180 932 1,349 1,996 2,376 2,488 2,194

Ensco PLC Quarterly Data

 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Gross_Profit 594 701 646 646 556 579 413 450 559 250
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to \$400 per referral. ( Learn More)