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Fabrinet (NYSE:FN)
Gross Profit
\$133 Mil (TTM As of Sep. 2016)

Fabrinet's gross profit for the three months ended in Sep. 2016 was \$40 Mil. Fabrinet's gross profit for the trailing twelve months (TTM) ended in Sep. 2016 was \$133 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Fabrinet's gross profit for the three months ended in Sep. 2016 was \$40 Mil. Fabrinet's revenue for the three months ended in Sep. 2016 was \$332 Mil. Therefore, Fabrinet's Gross Margin for the quarter that ended in Sep. 2016 was 11.93%.

Fabrinet had a gross margin of 11.93% for the quarter that ended in Sep. 2016 => No sustainable competitive advantage

During the past 11 years, the highest Gross Margin of Fabrinet was 14.57%. The lowest was 10.82%. And the median was 12.48%.

Definition

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

Fabrinet's Gross Profit for the fiscal year that ended in Jun. 2015 is calculated as

 Gross Profit (A: Jun. 2015 ) = Revenue - Cost of Goods Sold = 773.587 - 685.814 = 88

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

 Gross Profit (Q: Sep. 2016 ) = Revenue - Cost of Goods Sold = 332.043 - 292.435 = 40

Fabrinet Gross Profit for the trailing twelve months (TTM) ended in Sep. 2016 was 28.493 (Dec. 2015 ) + 31.177 (Mar. 2016 ) + 33.842 (Jun. 2016 ) + 39.608 (Sep. 2016 ) = \$133 Mil.

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

Fabrinet'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 = 40 / 332.043 = 11.93 %

* 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

Fabrinet had a gross margin of 11.93% for the quarter that ended in Sep. 2016 => No sustainable 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.

Fabrinet Annual Data

 Jun07 Jun08 Jun09 Jun10 Jun11 Jun12 Jun13 Jun14 Jun15 Jun16 Gross_Profit 72 68 58 64 95 62 69 74 88 120

Fabrinet Quarterly Data

 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Gross_Profit 18 21 21 22 25 26 28 31 34 40
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