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NII Holdings Inc (NAS:NIHD)
Gross Profit
$2,030 Mil (TTM As of Mar. 2014)

NII Holdings Inc's gross profit for the three months ended in Mar. 2014 was $367 Mil. NII Holdings Inc's gross profit for the trailing twelve months (TTM) ended in Mar. 2014 was $2,030 Mil.

Gross Margin is calculated as gross profit divided by its revenue. NII Holdings Inc's gross profit for the three months ended in Mar. 2014 was $367 Mil. NII Holdings Inc's revenue for the three months ended in Mar. 2014 was $970 Mil. Therefore, NII Holdings Inc's Gross Margin for the quarter that ended in Mar. 2014 was 37.81%.

NII Holdings Inc had a gross margin of 37.81% for the quarter that ended in Mar. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of NII Holdings Inc was 65.45%. The lowest was 15.74%. And the median was 58.57%.

Warning Sign:

NII Holdings Inc gross margin has been in long term decline. The average rate of decline per year is -2.6%.


Definition

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

NII Holdings 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
=4772.564 - 2383.955
=2,389

NII Holdings Inc's Gross Profit for the quarter that ended in Mar. 2014 is calculated as

Gross Profit (Q: Mar. 2014 )=Revenue - Cost of Goods Sold
=970.214 - 603.388
=367

NII Holdings Inc Gross Profit for the trailing twelve months (TTM) ended in Mar. 2014 was 632.688 (Jun. 2013 ) + 519.711 (Sep. 2013 ) + 510.765 (Dec. 2013 ) + 366.826 (Mar. 2014 ) = $2,030 Mil.

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

NII Holdings Inc's Gross Margin for the quarter that ended in Mar. 2014 is calculated as

Gross Margin (Q: Mar. 2014 )=Gross Profit (Q: Mar. 2014 ) / Revenue (Q: Mar. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=367 / 970.214
=37.81 %

* 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

NII Holdings Inc had a gross margin of 37.81% for the quarter that ended in Mar. 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.

NII Holdings Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 7401,0301,4422,0022,5732,5413,3724,0903,3392,389

NII Holdings Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Gross_Profit 957961803828789725633520511367
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