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Freeport-McMoRan Inc (NYSE:FCX)
Gross Profit
$-10,796 Mil (TTM As of Sep. 2015)

Freeport-McMoRan Inc's gross profit for the three months ended in Sep. 2015 was $-3,752 Mil. Freeport-McMoRan Inc's gross profit for the trailing twelve months (TTM) ended in Sep. 2015 was $-10,796 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Freeport-McMoRan Inc's gross profit for the three months ended in Sep. 2015 was $-3,752 Mil. Freeport-McMoRan Inc's revenue for the three months ended in Sep. 2015 was $3,681 Mil. Therefore, Freeport-McMoRan Inc's Gross Margin for the quarter that ended in Sep. 2015 was -101.93%.

Freeport-McMoRan Inc had a gross margin of -101.93% for the quarter that ended in Sep. 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 44.09%.

Warning Sign:

Freeport-McMoRan Inc gross margin has been in long term decline. The average rate of decline per year is -24.8%.


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 Dec. 2014 is calculated as

Gross Profit (A: Dec. 2014 )=Revenue - Cost of Goods Sold
=21438 - 19504
=1,934

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

Gross Profit (Q: Sep. 2015 )=Revenue - Cost of Goods Sold
=3681 - 7433
=-3,752

Freeport-McMoRan Inc Gross Profit for the trailing twelve months (TTM) ended in Sep. 2015 was -2066 (Dec. 2014 ) + -2802 (Mar. 2015 ) + -2176 (Jun. 2015 ) + -3752 (Sep. 2015 ) = $-10,796 Mil.

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

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

Gross Margin (Q: Sep. 2015 )=Gross Profit (Q: Sep. 2015 ) / Revenue (Q: Sep. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=-3,752 / 3681
=-101.93 %

* 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 -101.93% for the quarter that ended in Sep. 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Gross_Profit 3,2547,1664,8166,9019,6119,9606,4496,2841,934-12,647

Freeport-McMoRan Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
Gross_Profit 1,9141,9301,2821,4271,291-2,066-2,802-2,176-3,752-3,917
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