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NewMarket Corp (NYSE:NEU)
Gross Profit
$658 Mil (TTM As of Jun. 2014)

NewMarket Corp's gross profit for the three months ended in Jun. 2014 was $181 Mil. NewMarket Corp's gross profit for the trailing twelve months (TTM) ended in Jun. 2014 was $658 Mil.

Gross Margin is calculated as gross profit divided by its revenue. NewMarket Corp's gross profit for the three months ended in Jun. 2014 was $181 Mil. NewMarket Corp's revenue for the three months ended in Jun. 2014 was $620 Mil. Therefore, NewMarket Corp's Gross Margin for the quarter that ended in Jun. 2014 was 29.13%.

NewMarket Corp had a gross margin of 29.13% for the quarter that ended in Jun. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of NewMarket Corp was 38.90%. The lowest was 12.45%. And the median was 22.35%.


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. 2012 is calculated as

Gross Profit (A: Dec. 2012 )=Revenue - Cost of Goods Sold
=2223.309 - 1585.779
=638

NewMarket 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
=620.438 - 439.692
=181

NewMarket Corp Gross Profit for the trailing twelve months (TTM) ended in Jun. 2014 was 163.823 (Sep. 2013 ) + 151.638 (Dec. 2013 ) + 161.93 (Mar. 2014 ) + 180.746 (Jun. 2014 ) = $658 Mil.

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

NewMarket 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
=181 / 620.438
=29.13 %

* 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

NewMarket Corp had a gross margin of 29.13% for the quarter that ended in Jun. 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.

NewMarket Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 178200264297314463515559638653

NewMarket Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Gross_Profit 170165160141170169164152162181
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