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Western Digital Corp (NAS:WDC)
Gross Profit
\$3,815 Mil (TTM As of Sep. 2016)

Western Digital Corp's gross profit for the three months ended in Sep. 2016 was \$1,335 Mil. Western Digital Corp's gross profit for the trailing twelve months (TTM) ended in Sep. 2016 was \$3,815 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Western Digital Corp's gross profit for the three months ended in Sep. 2016 was \$1,335 Mil. Western Digital Corp's revenue for the three months ended in Sep. 2016 was \$4,714 Mil. Therefore, Western Digital Corp's Gross Margin for the quarter that ended in Sep. 2016 was 28.32%.

Western Digital Corp had a gross margin of 28.32% for the quarter that ended in Sep. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Western Digital Corp was 29.16%. The lowest was 16.46%. And the median was 25.41%.

Definition

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

Western Digital Corp's Gross Profit for the fiscal year that ended in Jun. 2016 is calculated as

 Gross Profit (A: Jun. 2016 ) = Revenue - Cost of Goods Sold = 12994 - 9559 = 3,435

Western Digital Corp's Gross Profit for the quarter that ended in Sep. 2016 is calculated as

 Gross Profit (Q: Sep. 2016 ) = Revenue - Cost of Goods Sold = 4714 - 3379 = 1,335

Western Digital Corp Gross Profit for the trailing twelve months (TTM) ended in Sep. 2016 was 906 (Dec. 2015 ) + 753 (Mar. 2016 ) + 821 (Jun. 2016 ) + 1335 (Sep. 2016 ) = \$3,815 Mil.

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

Western Digital Corp's Gross Margin for the quarter that ended in Sep. 2016 is calculated as

 Gross Margin (Q: Sep. 2016 ) = Gross Profit (Q: Sep. 2016 ) / Revenue (Q: Sep. 2016 ) = (Revenue - Cost of Goods Sold) / Revenue = 1,335 / 4714 = 28.32 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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

Western Digital Corp had a gross margin of 28.32% for the quarter that ended in Sep. 2016 => Competition eroding margins

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Western Digital Corp Annual Data

 Jun07 Jun08 Jun09 Jun10 Jun11 Jun12 Jun13 Jun14 Jun15 Jun16 Gross_Profit 900 1,739 1,337 2,401 1,791 3,638 4,363 4,360 4,221 3,435

Western Digital Corp Quarterly Data

 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Gross_Profit 1,029 1,149 1,110 1,032 930 955 906 753 821 1,335
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