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Helmerich & Payne Inc (NYSE:HP)
Gross Profit
\$725 Mil (TTM As of Sep. 2016)

Helmerich & Payne Inc's gross profit for the three months ended in Sep. 2016 was \$117 Mil. Helmerich & Payne Inc's gross profit for the trailing twelve months (TTM) ended in Sep. 2016 was \$725 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Helmerich & Payne Inc's gross profit for the three months ended in Sep. 2016 was \$117 Mil. Helmerich & Payne Inc's revenue for the three months ended in Sep. 2016 was \$332 Mil. Therefore, Helmerich & Payne Inc's Gross Margin for the quarter that ended in Sep. 2016 was 35.36%.

Helmerich & Payne Inc had a gross margin of 35.36% for the quarter that ended in Sep. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Helmerich & Payne Inc was 48.76%. The lowest was 42.83%. And the median was 45.66%.

Definition

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

Helmerich & Payne Inc's Gross Profit for the fiscal year that ended in Sep. 2016 is calculated as

 Gross Profit (A: Sep. 2016 ) = Revenue - Cost of Goods Sold = 1624.232 - 898.805 = 725

Helmerich & Payne 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 = 331.708 - 214.404 = 117

Helmerich & Payne Inc Gross Profit for the trailing twelve months (TTM) ended in Sep. 2016 was 211.203 (Dec. 2015 ) + 216.58 (Mar. 2016 ) + 180.34 (Jun. 2016 ) + 117.304 (Sep. 2016 ) = \$725 Mil.

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

Helmerich & Payne 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 = 117 / 331.708 = 35.36 %

* 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

Helmerich & Payne Inc had a gross margin of 35.36% for the quarter that ended in Sep. 2016 => Competition eroding margins

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.

Helmerich & Payne Inc Annual Data

 Sep07 Sep08 Sep09 Sep10 Sep11 Sep12 Sep13 Sep14 Sep15 Sep16 Gross_Profit 767 950 899 803 1,111 1,401 1,535 1,709 1,458 725

Helmerich & Payne Inc Quarterly Data

 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Gross_Profit 437 444 501 419 311 228 211 217 180 117
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