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Royal Caribbean Cruises Ltd (NYSE:RCL)
Gross Profit
$2,609 Mil (TTM As of Mar. 2014)

Royal Caribbean Cruises Ltd's gross profit for the three months ended in Mar. 2014 was $583 Mil. Royal Caribbean Cruises Ltd's gross profit for the trailing twelve months (TTM) ended in Mar. 2014 was $2,609 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Royal Caribbean Cruises Ltd's gross profit for the three months ended in Mar. 2014 was $583 Mil. Royal Caribbean Cruises Ltd's revenue for the three months ended in Mar. 2014 was $1,887 Mil. Therefore, Royal Caribbean Cruises Ltd's Gross Margin for the quarter that ended in Mar. 2014 was 30.90%.

Royal Caribbean Cruises Ltd had a gross margin of 30.90% for the quarter that ended in Mar. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Royal Caribbean Cruises Ltd was 42.34%. The lowest was 30.88%. And the median was 37.12%.


Definition

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

Royal Caribbean Cruises Ltd'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
=7959.894 - 5305.27
=2,655

Royal Caribbean Cruises Ltd's Gross Profit for the quarter that ended in Mar. 2014 is calculated as

Gross Profit (Q: Mar. 2014 )=Revenue - Cost of Goods Sold
=1887.224 - 1303.98
=583

Royal Caribbean Cruises Ltd Gross Profit for the trailing twelve months (TTM) ended in Mar. 2014 was 559.148 (Jun. 2013 ) + 894.948 (Sep. 2013 ) + 571.498 (Dec. 2013 ) + 583.244 (Mar. 2014 ) = $2,609 Mil.

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

Royal Caribbean Cruises Ltd'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
=583 / 1887.224
=30.90 %

* 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

Royal Caribbean Cruises Ltd had a gross margin of 30.90% 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.

Royal Caribbean Cruises Ltd Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 1,7361,9091,9802,1672,1291,8192,2942,5952,5312,655

Royal Caribbean Cruises Ltd Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Gross_Profit 525579525878548629559895571583
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