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NewMarket Corp (NYSE:NEU)
Gross Profit
$685 Mil (TTM As of Sep. 2016)

NewMarket Corp's gross profit for the three months ended in Sep. 2016 was $177 Mil. NewMarket Corp's gross profit for the trailing twelve months (TTM) ended in Sep. 2016 was $685 Mil.

Gross Margin is calculated as gross profit divided by its revenue. NewMarket Corp's gross profit for the three months ended in Sep. 2016 was $177 Mil. NewMarket Corp's revenue for the three months ended in Sep. 2016 was $516 Mil. Therefore, NewMarket Corp's Gross Margin for the quarter that ended in Sep. 2016 was 34.37%.

NewMarket Corp had a gross margin of 34.37% for the quarter that ended in Sep. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of NewMarket Corp was 33.77%. The lowest was 19.44%. And the median was 28.50%.


Definition

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

NewMarket Corp'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
=2140.83 - 1461.774
=679

NewMarket Corp's Gross Profit for the quarter that ended in Sep. 2016 is calculated as

Gross Profit (Q: Sep. 2016 )=Revenue - Cost of Goods Sold
=516.09 - 338.689
=177

NewMarket Corp Gross Profit for the trailing twelve months (TTM) ended in Sep. 2016 was 153.305 (Dec. 2015 ) + 175.55 (Mar. 2016 ) + 178.4 (Jun. 2016 ) + 177.401 (Sep. 2016 ) = $685 Mil.

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

NewMarket Corp's Gross Margin for the quarter that ended in Sep. 2016 is calculated as

Gross Margin (Q: Sep. 2016 )=Gross Profit (Q: Sep. 2016 ) / Revenue (Q: Sep. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=177 / 516.09
=34.37 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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

NewMarket Corp had a gross margin of 34.37% for the quarter that ended in Sep. 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 local exchange's currency.

NewMarket Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Gross_Profit 264297314463515552630653665679

NewMarket Corp Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
Gross_Profit 181165158181170175153176178177
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