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FirstEnergy Corp (NYSE:FE)
Gross Profit
$8,946 Mil (TTM As of Mar. 2016)

FirstEnergy Corp's gross profit for the three months ended in Mar. 2016 was $2,364 Mil. FirstEnergy Corp's gross profit for the trailing twelve months (TTM) ended in Mar. 2016 was $8,946 Mil.

Gross Margin is calculated as gross profit divided by its revenue. FirstEnergy Corp's gross profit for the three months ended in Mar. 2016 was $2,364 Mil. FirstEnergy Corp's revenue for the three months ended in Mar. 2016 was $3,869 Mil. Therefore, FirstEnergy Corp's Gross Margin for the quarter that ended in Mar. 2016 was 61.10%.

FirstEnergy Corp had a gross margin of 61.10% for the quarter that ended in Mar. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of FirstEnergy Corp was 66.54%. The lowest was 53.51%. And the median was 56.44%.


Definition

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

FirstEnergy Corp'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
=15049 - 6996
=8,053

FirstEnergy Corp's Gross Profit for the quarter that ended in Mar. 2016 is calculated as

Gross Profit (Q: Mar. 2016 )=Revenue - Cost of Goods Sold
=3869 - 1505
=2,364

FirstEnergy Corp Gross Profit for the trailing twelve months (TTM) ended in Mar. 2016 was 2093 (Jun. 2015 ) + 2432 (Sep. 2015 ) + 2057 (Dec. 2015 ) + 2364 (Mar. 2016 ) = $8,946 Mil.

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

FirstEnergy Corp's Gross Margin for the quarter that ended in Mar. 2016 is calculated as

Gross Margin (Q: Mar. 2016 )=Gross Profit (Q: Mar. 2016 ) / Revenue (Q: Mar. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=2,364 / 3869
=61.10 %

* 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

FirstEnergy Corp had a gross margin of 61.10% for the quarter that ended in Mar. 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 own currency.

FirstEnergy Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Gross_Profit 7,2487,7887,9967,0847,2838,9558,5958,4588,0538,853

FirstEnergy Corp Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
Gross_Profit 2,0352,1171,8632,1561,9242,2712,0932,4322,0572,364
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