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International Game Technology PLC (NYSE:IGT)
Gross Profit
$1,956 Mil (TTM As of Mar. 2016)

International Game Technology PLC's gross profit for the three months ended in Mar. 2016 was $511 Mil. International Game Technology PLC's gross profit for the trailing twelve months (TTM) ended in Mar. 2016 was $1,956 Mil.

Gross Margin is calculated as gross profit divided by its revenue. International Game Technology PLC's gross profit for the three months ended in Mar. 2016 was $511 Mil. International Game Technology PLC's revenue for the three months ended in Mar. 2016 was $1,282 Mil. Therefore, International Game Technology PLC's Gross Margin for the quarter that ended in Mar. 2016 was 39.87%.

International Game Technology PLC had a gross margin of 39.87% for the quarter that ended in Mar. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of International Game Technology PLC was 58.26%. The lowest was 37.35%. And the median was 50.94%.

Warning Sign:

International Game Technology PLC gross margin has been in long term decline. The average rate of decline per year is -3%.


Definition

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

International Game Technology PLC's Gross Profit for the fiscal year that ended in Dec. 2015 is calculated as

Gross Profit (A: Dec. 2015 )=Revenue - Cost of Goods Sold
=4689.056 - 2937.658
=1,751

International Game Technology PLC's Gross Profit for the quarter that ended in Mar. 2016 is calculated as

Gross Profit (Q: Mar. 2016 )=Revenue - Cost of Goods Sold
=1281.561 - 770.539
=511

International Game Technology PLC Gross Profit for the trailing twelve months (TTM) ended in Mar. 2016 was 480.181 (Jun. 2015 ) + 453.962 (Sep. 2015 ) + 510.635 (Dec. 2015 ) + 511.022 (Mar. 2016 ) = $1,956 Mil.

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

International Game Technology PLC'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
=511 / 1281.561
=39.87 %

* 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

International Game Technology PLC had a gross margin of 39.87% for the quarter that ended in Mar. 2016 => Competition eroding margins


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.

International Game Technology PLC Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Gross_Profit 6821,4111,4861,6111,5461,7691,9372,0401,9721,751

International Game Technology PLC Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
Gross_Profit -388587304319297306480454511511
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