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Sempra Energy (NYSE:SRE)
Gross Profit
$6,337 Mil (TTM As of Sep. 2015)

Sempra Energy's gross profit for the three months ended in Sep. 2015 was $1,489 Mil. Sempra Energy's gross profit for the trailing twelve months (TTM) ended in Sep. 2015 was $6,337 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Sempra Energy's gross profit for the three months ended in Sep. 2015 was $1,489 Mil. Sempra Energy's revenue for the three months ended in Sep. 2015 was $2,481 Mil. Therefore, Sempra Energy's Gross Margin for the quarter that ended in Sep. 2015 was 60.02%.

Sempra Energy had a gross margin of 60.02% for the quarter that ended in Sep. 2015 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Sempra Energy was 94.58%. The lowest was 44.26%. And the median was 60.06%.


Definition

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

Sempra Energy's Gross Profit for the fiscal year that ended in Dec. 2014 is calculated as

Gross Profit (A: Dec. 2014 )=Revenue - Cost of Goods Sold
=11035 - 4754
=6,281

Sempra Energy's Gross Profit for the quarter that ended in Sep. 2015 is calculated as

Gross Profit (Q: Sep. 2015 )=Revenue - Cost of Goods Sold
=2481 - 992
=1,489

Sempra Energy Gross Profit for the trailing twelve months (TTM) ended in Sep. 2015 was 1611 (Dec. 2014 ) + 1722 (Mar. 2015 ) + 1515 (Jun. 2015 ) + 1489 (Sep. 2015 ) = $6,337 Mil.

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

Sempra Energy's Gross Margin for the quarter that ended in Sep. 2015 is calculated as

Gross Margin (Q: Sep. 2015 )=Gross Profit (Q: Sep. 2015 ) / Revenue (Q: Sep. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=1,489 / 2481
=60.02 %

* 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

Sempra Energy had a gross margin of 60.02% for the quarter that ended in Sep. 2015 => Durable competitive advantage


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.

Sempra Energy Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Gross_Profit 10,8888,2847,9764,7614,8485,2205,8905,9576,3666,281

Sempra Energy Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
Gross_Profit 1,6661,5861,6261,4891,5441,6371,6111,7221,5151,489
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