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Freeport-McMoRan Inc (NYSE:FCX)
Gross Profit
$-5,753 Mil (TTM As of Jun. 2015)

Freeport-McMoRan Inc's gross profit for the three months ended in Jun. 2015 was $-2,176 Mil. Freeport-McMoRan Inc's gross profit for the trailing twelve months (TTM) ended in Jun. 2015 was $-5,753 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Freeport-McMoRan Inc's gross profit for the three months ended in Jun. 2015 was $-2,176 Mil. Freeport-McMoRan Inc's revenue for the three months ended in Jun. 2015 was $4,248 Mil. Therefore, Freeport-McMoRan Inc's Gross Margin for the quarter that ended in Jun. 2015 was -51.22%.

Freeport-McMoRan Inc had a gross margin of -51.22% for the quarter that ended in Jun. 2015 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of Freeport-McMoRan Inc was 60.61%. The lowest was 9.02%. And the median was 48.45%.

Warning Sign:

Freeport-McMoRan Inc gross margin has been in long term decline. The average rate of decline per year is -25%.


Definition

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

Freeport-McMoRan Inc's Gross Profit for the fiscal year that ended in Mar. 2014 is calculated as

Gross Profit (A: Mar. 2014 )=Revenue - Cost of Goods Sold
=21323 - 15292
=6,031

Freeport-McMoRan Inc's Gross Profit for the quarter that ended in Jun. 2015 is calculated as

Gross Profit (Q: Jun. 2015 )=Revenue - Cost of Goods Sold
=4248 - 6424
=-2,176

Freeport-McMoRan Inc Gross Profit for the trailing twelve months (TTM) ended in Jun. 2015 was 1291 (Sep. 2014 ) + -2066 (Dec. 2014 ) + -2802 (Mar. 2015 ) + -2176 (Jun. 2015 ) = $-5,753 Mil.

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

Freeport-McMoRan Inc's Gross Margin for the quarter that ended in Jun. 2015 is calculated as

Gross Margin (Q: Jun. 2015 )=Gross Profit (Q: Jun. 2015 ) / Revenue (Q: Jun. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=-2,176 / 4248
=-51.22 %

* 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

Freeport-McMoRan Inc had a gross margin of -51.22% for the quarter that ended in Jun. 2015 => 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.

Freeport-McMoRan Inc Annual Data

Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14
Gross_Profit 1,2672,7023,9968,3263,0738,37610,5188,7706,0746,031

Freeport-McMoRan Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
Gross_Profit 1,5359051,9141,9301,2821,4271,291-2,066-2,802-2,176
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