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Magellan Midstream Partners, L.P. (NYSE:MMP)
Gross Profit
$1,204 Mil (TTM As of Jun. 2015)

Magellan Midstream Partners, L.P.'s gross profit for the three months ended in Jun. 2015 was $262 Mil. Magellan Midstream Partners, L.P.'s gross profit for the trailing twelve months (TTM) ended in Jun. 2015 was $1,204 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Magellan Midstream Partners, L.P.'s gross profit for the three months ended in Jun. 2015 was $262 Mil. Magellan Midstream Partners, L.P.'s revenue for the three months ended in Jun. 2015 was $488 Mil. Therefore, Magellan Midstream Partners, L.P.'s Gross Margin for the quarter that ended in Jun. 2015 was 53.66%.

Magellan Midstream Partners, L.P. had a gross margin of 53.66% for the quarter that ended in Jun. 2015 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Magellan Midstream Partners, L.P. was 54.91%. The lowest was 28.55%. And the median was 43.29%.


Definition

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

Magellan Midstream Partners, L.P.'s Gross Profit for the fiscal year that ended in Dec. 2014 is calculated as

Gross Profit (A: Dec. 2014 )=Revenue - Cost of Goods Sold
=2303.723 - 1038.857
=1,265

Magellan Midstream Partners, L.P.'s Gross Profit for the quarter that ended in Jun. 2015 is calculated as

Gross Profit (Q: Jun. 2015 )=Revenue - Cost of Goods Sold
=487.543 - 225.94
=262

Magellan Midstream Partners, L.P. Gross Profit for the trailing twelve months (TTM) ended in Jun. 2015 was 297.623 (Sep. 2014 ) + 357.705 (Dec. 2014 ) + 287.416 (Mar. 2015 ) + 261.603 (Jun. 2015 ) = $1,204 Mil.

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

Magellan Midstream Partners, L.P.'s Gross Margin for the quarter that ended in Jun. 2015 is calculated as

Gross Margin (Q: Jun. 2015 )=Gross Profit (Q: Jun. 2015 ) / Revenue (Q: Jun. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=262 / 487.543
=53.66 %

* 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

Magellan Midstream Partners, L.P. had a gross margin of 53.66% for the quarter that ended in Jun. 2015 => 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.

Magellan Midstream Partners, L.P. Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Gross_Profit 3253744335124766077367879741,265

Magellan Midstream Partners, L.P. Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
Gross_Profit 207251220295347262298358287262
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