Gross Margin % is calculated as gross profit divided by its revenue. Chemtura's Gross Profit for the
three
months ended in Dec. 2016 was $108 Mil. Chemtura's Revenue for the
three
months ended in Dec. 2016 was $385 Mil. Therefore, Chemtura's Gross Margin % for the quarter that ended in Dec. 2016 was 28.05%.
The historical rank and industry rank for Chemtura's Gross Margin % or its related term are showing as below:
CHMT's Gross Margin % is not ranked *
in the Chemicals industry.
Industry Median: 22.32 * Ranked among companies with meaningful Gross Margin % only.
Chemtura had a gross margin of 28.05% for the quarter that ended in Dec. 2016 => Competition eroding margins
The 5-Year average Growth Rate of Gross Margin for Chemtura was 0.00% per year.
Chemtura Gross Margin % Historical Data
The historical data trend for Chemtura's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Chemtura's Gross Margin %
For the Specialty Chemicals subindustry, Chemtura's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Chemtura's Gross Margin % Distribution in the Chemicals Industry
For the Chemicals industry and Basic Materials sector, Chemtura's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Chemtura's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange 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.
Chemtura (NYSE:CHMT) Gross Margin % 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
Chemtura had a gross margin of 28.05% for the quarter that ended in Dec. 2016 => Competition eroding margins
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Chemtura Gross Margin % Related Terms
Thank you for viewing the detailed overview of Chemtura's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
Chemtura manufactures and sells a variety of chemicals, which include lubricants and bromine. The company organizes itself into two segments based on product type. The industrial performance products segment, which generates most of Chemtura's revenue, sells synthetic lubricants and specialty greases that reduce friction for engines and machines. These products are typically sold to the automotive, aviation, marine, and refrigeration industries. The industrial engineered products segment sells a variety of bromine-based products, which include brominated flame retardants for consumer electronics, oil and gas drilling fluids, and pesticides for the agricultural industry. More revenue comes from North America than any other region.
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