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KLA-Tencor Corp (NAS:KLAC)
Gross Profit
$1,696 Mil (TTM As of Jun. 2014)

KLA-Tencor Corp's gross profit for the three months ended in Jun. 2014 was $408 Mil. KLA-Tencor Corp's gross profit for the trailing twelve months (TTM) ended in Jun. 2014 was $1,696 Mil.

Gross Margin is calculated as gross profit divided by its revenue. KLA-Tencor Corp's gross profit for the three months ended in Jun. 2014 was $408 Mil. KLA-Tencor Corp's revenue for the three months ended in Jun. 2014 was $734 Mil. Therefore, KLA-Tencor Corp's Gross Margin for the quarter that ended in Jun. 2014 was 55.52%.

KLA-Tencor Corp had a gross margin of 55.52% for the quarter that ended in Jun. 2014 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of KLA-Tencor Corp was 60.34%. The lowest was 43.11%. And the median was 55.20%.


Definition

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

KLA-Tencor Corp's Gross Profit for the fiscal year that ended in Jun. 2014 is calculated as

Gross Profit (A: Jun. 2014 )=Revenue - Cost of Goods Sold
=2929.408 - 1232.962
=1,696

KLA-Tencor Corp's Gross Profit for the quarter that ended in Jun. 2014 is calculated as

Gross Profit (Q: Jun. 2014 )=Revenue - Cost of Goods Sold
=734.343 - 326.665
=408

KLA-Tencor Corp Gross Profit for the trailing twelve months (TTM) ended in Jun. 2014 was 380.68 (Sep. 2013 ) + 419.315 (Dec. 2013 ) + 488.773 (Mar. 2014 ) + 407.678 (Jun. 2014 ) = $1,696 Mil.

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

KLA-Tencor Corp's Gross Margin for the quarter that ended in Jun. 2014 is calculated as

Gross Margin (Q: Jun. 2014 )=Gross Profit (Q: Jun. 2014 ) / Revenue (Q: Jun. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=408 / 734.343
=55.52 %

* 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

KLA-Tencor Corp had a gross margin of 55.52% for the quarter that ended in Jun. 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.

KLA-Tencor Corp Annual Data

Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14
Gross_Profit 1,2231,1291,5411,3766551,0051,9161,8421,6051,696

KLA-Tencor Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Gross_Profit 485531403369420413381419489408
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