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Freeport-McMoRan Inc (NYSE:FCX)
Gross Profit
$-7,544 Mil (TTM As of Sep. 2016)

Freeport-McMoRan Inc's gross profit for the three months ended in Sep. 2016 was $466 Mil. Freeport-McMoRan Inc's gross profit for the trailing twelve months (TTM) ended in Sep. 2016 was $-7,544 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. 2016 was $466 Mil. Freeport-McMoRan Inc's revenue for the three months ended in Sep. 2016 was $3,877 Mil. Therefore, Freeport-McMoRan Inc's Gross Margin for the quarter that ended in Sep. 2016 was 12.02%.

Freeport-McMoRan Inc had a gross margin of 12.02% for the quarter that ended in Sep. 2016 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of Freeport-McMoRan Inc was 56.19%. The lowest was -79.66%. And the median was 39.06%.


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. 2015 is calculated as

Gross Profit (A: Dec. 2015 )=Revenue - Cost of Goods Sold
=15877 - 28524
=-12,647

Freeport-McMoRan Inc's Gross Profit for the quarter that ended in Sep. 2016 is calculated as

Gross Profit (Q: Sep. 2016 )=Revenue - Cost of Goods Sold
=3877 - 3411
=466

Freeport-McMoRan Inc Gross Profit for the trailing twelve months (TTM) ended in Sep. 2016 was -3758 (Dec. 2015 ) + -3707 (Mar. 2016 ) + -545 (Jun. 2016 ) + 466 (Sep. 2016 ) = $-7,544 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. 2016 is calculated as

Gross Margin (Q: Sep. 2016 )=Gross Profit (Q: Sep. 2016 ) / Revenue (Q: Sep. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=466 / 3877
=12.02 %

* 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

Freeport-McMoRan Inc had a gross margin of 12.02% for the quarter that ended in Sep. 2016 => 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 local exchange's 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

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
Gross_Profit 1,4271,291-2,066-2,802-2,232-3,779-3,758-3,707-545466
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