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Molycorp Inc (NYSE:MCP)
Gross Profit
\$-81.5 Mil (TTM As of Sep. 2014)

Molycorp Inc's gross profit for the three months ended in Sep. 2014 was \$-15.1 Mil. Molycorp Inc's gross profit for the trailing twelve months (TTM) ended in Sep. 2014 was \$-81.5 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Molycorp Inc's gross profit for the three months ended in Sep. 2014 was \$-15.1 Mil. Molycorp Inc's revenue for the three months ended in Sep. 2014 was \$123.9 Mil. Therefore, Molycorp Inc's Gross Margin for the quarter that ended in Sep. 2014 was -12.17%.

Molycorp Inc had a gross margin of -12.17% for the quarter that ended in Sep. 2014 => No sustainable competitive advantage

During the past 5 years, the highest Gross Margin of Molycorp Inc was 55.17%. The lowest was -207.13%. And the median was 1.89%.

Definition

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

Molycorp 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 = 554.39 - 621.558 = -67.2

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

 Gross Profit (Q: Sep. 2014 ) = Revenue - Cost of Goods Sold = 123.937 - 139.015 = -15.1

Molycorp Inc Gross Profit for the trailing twelve months (TTM) ended in Sep. 2014 was -26.766 (Dec. 2013 ) + -23.094 (Mar. 2014 ) + -16.571 (Jun. 2014 ) + -15.078 (Sep. 2014 ) = \$-81.5 Mil.

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

Molycorp Inc'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 = -15.1 / 123.937 = -12.17 %

* 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

Molycorp Inc had a gross margin of -12.17% for the quarter that ended in Sep. 2014 => No sustainable competitive advantage

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Molycorp Inc Annual Data

 Dec09 Dec10 Dec11 Dec12 Dec13 Gross_Profit 0.0 0.0 0.0 0.0 0.0 -14.7 0.7 218.9 18.8 -67.2

Molycorp Inc Quarterly Data

 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Gross_Profit -4.1 11.4 -19.5 -4.5 -18.0 -17.8 -26.8 -23.1 -16.6 -15.1
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