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Micron Technology Inc (NAS:MU)
Gross Profit
$5,794 Mil (TTM As of Nov. 2014)

Micron Technology Inc's gross profit for the three months ended in Nov. 2014 was $1,638 Mil. Micron Technology Inc's gross profit for the trailing twelve months (TTM) ended in Nov. 2014 was $5,794 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Micron Technology Inc's gross profit for the three months ended in Nov. 2014 was $1,638 Mil. Micron Technology Inc's revenue for the three months ended in Nov. 2014 was $4,573 Mil. Therefore, Micron Technology Inc's Gross Margin for the quarter that ended in Nov. 2014 was 35.82%.

Micron Technology Inc had a gross margin of 35.82% for the quarter that ended in Nov. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Micron Technology Inc was 55.00%. The lowest was -9.16%. And the median was 23.13%.


Definition

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

Micron Technology Inc's Gross Profit for the fiscal year that ended in Aug. 2014 is calculated as

Gross Profit (A: Aug. 2014 )=Revenue - Cost of Goods Sold
=16358 - 10921
=5,437

Micron Technology Inc's Gross Profit for the quarter that ended in Nov. 2014 is calculated as

Gross Profit (Q: Nov. 2014 )=Revenue - Cost of Goods Sold
=4573 - 2935
=1,638

Micron Technology Inc Gross Profit for the trailing twelve months (TTM) ended in Nov. 2014 was 1403 (Feb. 2014 ) + 1368 (May. 2014 ) + 1385 (Aug. 2014 ) + 1638 (Nov. 2014 ) = $5,794 Mil.

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

Micron Technology Inc's Gross Margin for the quarter that ended in Nov. 2014 is calculated as

Gross Margin (Q: Nov. 2014 )=Gross Profit (Q: Nov. 2014 ) / Revenue (Q: Nov. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=1,638 / 4573
=35.82 %

* 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

Micron Technology Inc had a gross margin of 35.82% for the quarter that ended in Nov. 2014 => 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.

Micron Technology Inc Annual Data

Aug05Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14
Gross_Profit 1,1461,2011,078-55-4402,7141,7589681,8475,437

Micron Technology Inc Quarterly Data

Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14Nov14
Gross_Profit 2192173665567081,2811,4031,3681,3851,638
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