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Harte-Hanks, Inc. (NYSE:HHS)
Gross Profit
$434.0 Mil (TTM As of Dec. 2013)

Harte-Hanks, Inc.'s gross profit for the three months ended in Dec. 2013 was $109.5 Mil. Harte-Hanks, Inc.'s gross profit for the trailing twelve months (TTM) ended in Dec. 2013 was $434.0 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Harte-Hanks, Inc.'s gross profit for the three months ended in Dec. 2013 was $109.5 Mil. Harte-Hanks, Inc.'s revenue for the three months ended in Dec. 2013 was $152.2 Mil. Therefore, Harte-Hanks, Inc.'s Gross Margin for the quarter that ended in Dec. 2013 was 71.92%.

Harte-Hanks, Inc. had a gross margin of 71.92% for the quarter that ended in Dec. 2013 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Harte-Hanks, Inc. was 71.12%. The lowest was 26.22%. And the median was 62.51%.


Definition

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

Harte-Hanks, Inc.'s Gross Profit for the fiscal year that ended in Dec. 2013 is calculated as

Gross Profit (A: Dec. 2013 )=Revenue - Cost of Goods Sold
=559.609 - 161.6
=398.0

Harte-Hanks, Inc.'s Gross Profit for the quarter that ended in Dec. 2013 is calculated as

Gross Profit (Q: Dec. 2013 )=Revenue - Cost of Goods Sold
=152.179 - 42.729
=109.5

Harte-Hanks, Inc. Gross Profit for the trailing twelve months (TTM) ended in Dec. 2013 was 110.745 (Mar. 2013 ) + 118.159 (Jun. 2013 ) + 95.658 (Sep. 2013 ) + 109.45 (Dec. 2013 ) = $434.0 Mil.

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

Harte-Hanks, Inc.'s Gross Margin for the quarter that ended in Dec. 2013 is calculated as

Gross Margin (Q: Dec. 2013 )=Gross Profit (Q: Dec. 2013 ) / Revenue (Q: Dec. 2013 )
=(Revenue - Cost of Goods Sold) / Revenue
=109.5 / 152.179
=71.92 %

* 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

Harte-Hanks, Inc. had a gross margin of 71.92% for the quarter that ended in Dec. 2013 => 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.

Harte-Hanks, Inc. Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 274.7309.4310.6760.1684.1547.9521.5510.9409.0398.0

Harte-Hanks, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Gross_Profit 131.5124.9118.4120.998.5110.0110.7118.295.7109.5
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