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RR Donnelley & Sons Co (NAS:RRD)
Gross Profit
$2,487 Mil (TTM As of Sep. 2014)

RR Donnelley & Sons Co's gross profit for the three months ended in Sep. 2014 was $648 Mil. RR Donnelley & Sons Co's gross profit for the trailing twelve months (TTM) ended in Sep. 2014 was $2,487 Mil.

Gross Margin is calculated as gross profit divided by its revenue. RR Donnelley & Sons Co's gross profit for the three months ended in Sep. 2014 was $648 Mil. RR Donnelley & Sons Co's revenue for the three months ended in Sep. 2014 was $2,958 Mil. Therefore, RR Donnelley & Sons Co's Gross Margin for the quarter that ended in Sep. 2014 was 21.89%.

RR Donnelley & Sons Co had a gross margin of 21.89% for the quarter that ended in Sep. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of RR Donnelley & Sons Co was 29.58%. The lowest was 17.19%. And the median was 25.27%.

Warning Sign:

RR Donnelley & Sons Co gross margin has been in long term decline. The average rate of decline per year is -2.7%.


Definition

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

RR Donnelley & Sons Co'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
=10480.3 - 8149.8
=2,331

RR Donnelley & Sons Co's Gross Profit for the quarter that ended in Sep. 2014 is calculated as

Gross Profit (Q: Sep. 2014 )=Revenue - Cost of Goods Sold
=2957.8 - 2310.2
=648

RR Donnelley & Sons Co Gross Profit for the trailing twelve months (TTM) ended in Sep. 2014 was 603.6 (Dec. 2013 ) + 573.2 (Mar. 2014 ) + 662.2 (Jun. 2014 ) + 647.6 (Sep. 2014 ) = $2,487 Mil.

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

RR Donnelley & Sons Co's Gross Margin for the quarter that ended in Sep. 2014 is calculated as

Gross Margin (Q: Sep. 2014 )=Gross Profit (Q: Sep. 2014 ) / Revenue (Q: Sep. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=648 / 2957.8
=21.89 %

* 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

RR Donnelley & Sons Co had a gross margin of 21.89% for the quarter that ended in Sep. 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.

RR Donnelley & Sons Co Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 1,8872,3402,5183,0553,0052,3952,3762,5192,3332,331

RR Donnelley & Sons Co Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Gross_Profit 595573585558598570604573662648
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