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Icon PLC (NAS:ICLR)
Gross Profit
$570 Mil (TTM As of Sep. 2014)

Icon PLC's gross profit for the three months ended in Sep. 2014 was $158 Mil. Icon PLC's gross profit for the trailing twelve months (TTM) ended in Sep. 2014 was $570 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Icon PLC's gross profit for the three months ended in Sep. 2014 was $158 Mil. Icon PLC's revenue for the three months ended in Sep. 2014 was $388 Mil. Therefore, Icon PLC's Gross Margin for the quarter that ended in Sep. 2014 was 40.67%.

Icon PLC had a gross margin of 40.67% for the quarter that ended in Sep. 2014 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Icon PLC was 47.94%. The lowest was 35.30%. And the median was 43.80%.

Warning Sign:

Icon PLC gross margin has been in long term decline. The average rate of decline per year is -4.2%.


Definition

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

Icon PLC'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
=1336.058 - 845.413
=491

Icon PLC's Gross Profit for the quarter that ended in Sep. 2014 is calculated as

Gross Profit (Q: Sep. 2014 )=Revenue - Cost of Goods Sold
=387.589 - 229.963
=158

Icon PLC Gross Profit for the trailing twelve months (TTM) ended in Sep. 2014 was 130.085 (Dec. 2013 ) + 133.494 (Mar. 2014 ) + 148.832 (Jun. 2014 ) + 157.626 (Sep. 2014 ) = $570 Mil.

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

Icon PLC's Gross Margin for the quarter that ended in Sep. 2014 is calculated as

Gross Margin (Q: Sep. 2014 )=Gross Profit (Q: Sep. 2014 ) / Revenue (Q: Sep. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=158 / 387.589
=40.67 %

* 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

Icon PLC had a gross margin of 40.67% for the quarter that ended in Sep. 2014 => 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.

Icon PLC Annual Data

May04May05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 134147199276376380359334397491

Icon PLC Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Gross_Profit 97102108114120126130133149158
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