Switch to:
Targa Resources Corp (NYSE:TRGP)
Gross Profit
$1,416 Mil (TTM As of Jun. 2014)

Targa Resources Corp's gross profit for the three months ended in Jun. 2014 was $384 Mil. Targa Resources Corp's gross profit for the trailing twelve months (TTM) ended in Jun. 2014 was $1,416 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Targa Resources Corp's gross profit for the three months ended in Jun. 2014 was $384 Mil. Targa Resources Corp's revenue for the three months ended in Jun. 2014 was $2,062 Mil. Therefore, Targa Resources Corp's Gross Margin for the quarter that ended in Jun. 2014 was 18.62%.

Targa Resources Corp had a gross margin of 18.62% for the quarter that ended in Jun. 2014 => No sustainable competitive advantage

During the past 6 years, the highest Gross Margin of Targa Resources Corp was 17.96%. The lowest was 9.76%. And the median was 15.34%.


Definition

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

Targa Resources Corp'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
=6556 - 5378.5
=1,178

Targa Resources Corp's Gross Profit for the quarter that ended in Jun. 2014 is calculated as

Gross Profit (Q: Jun. 2014 )=Revenue - Cost of Goods Sold
=2061.9 - 1677.9
=384

Targa Resources Corp Gross Profit for the trailing twelve months (TTM) ended in Jun. 2014 was 297 (Sep. 2013 ) + 355.1 (Dec. 2013 ) + 379.6 (Mar. 2014 ) + 384 (Jun. 2014 ) = $1,416 Mil.

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

Targa Resources Corp's Gross Margin for the quarter that ended in Jun. 2014 is calculated as

Gross Margin (Q: Jun. 2014 )=Gross Profit (Q: Jun. 2014 ) / Revenue (Q: Jun. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=384 / 2061.9
=18.62 %

* 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

Targa Resources Corp had a gross margin of 18.62% for the quarter that ended in Jun. 2014 => 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.

Targa Resources Corp Annual Data

Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 00007807457819561,0071,178

Targa Resources Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Gross_Profit 262245241260260265297355380384
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