Switch to:
Titanium Metals Corporation (NYSE:TIE)
Gross Profit
$224 Mil (TTM As of Sep. 2012)

Titanium Metals Corporation's gross profit for the six months ended in Sep. 2012 was $50 Mil. Titanium Metals Corporation's gross profit for the trailing twelve months (TTM) ended in Sep. 2012 was $224 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Titanium Metals Corporation's gross profit for the six months ended in Sep. 2012 was $50 Mil. Titanium Metals Corporation's revenue for the six months ended in Sep. 2012 was $258 Mil. Therefore, Titanium Metals Corporation's Gross Margin for the quarter that ended in Sep. 2012 was 19.52%.

Titanium Metals Corporation had a gross margin of 19.52% for the quarter that ended in Sep. 2012 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of Titanium Metals Corporation was 36.86%. The lowest was -0.85%. And the median was 21.16%.

Warning Sign:

Titanium Metals Corporation gross margin has been in long term decline. The average rate of decline per year is -12.8%.


Definition

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

Titanium Metals Corporation's Gross Profit for the fiscal year that ended in Dec. 2011 is calculated as

Gross Profit (A: Dec. 2011 )=Revenue - Cost of Goods Sold
=1045.2 - 821.6
=224

Titanium Metals Corporation's Gross Profit for the quarter that ended in Sep. 2012 is calculated as

Gross Profit (Q: Sep. 2012 )=Revenue - Cost of Goods Sold
=257.7 - 207.4
=50

For company reported semi-annually, GuruFocus uses latest annual data as the TTM data. Titanium Metals Corporation Gross Profit for the trailing twelve months (TTM) ended in Sep. 2012 was $224 Mil.

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

Titanium Metals Corporation's Gross Margin for the quarter that ended in Sep. 2012 is calculated as

Gross Margin (Q: Sep. 2012 )=Gross Profit (Q: Sep. 2012 ) / Revenue (Q: Sep. 2012 )
=(Revenue - Cost of Goods Sold) / Revenue
=50 / 257.7
=19.52 %

* 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

Titanium Metals Corporation had a gross margin of 19.52% for the quarter that ended in Sep. 2012 => No sustainable 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.

Titanium Metals Corporation Annual Data

Dec02Dec03Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11
Gross_Profit -31756199436447288113179224

Titanium Metals Corporation Semi-Annual Data

Jun10Sep10Dec10Mar11Jun11Sep11Dec11Mar12Jun12Sep12
Gross_Profit 41505148635557586150
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK