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CSX Corp (NYSE:CSX)
Gross Margin
66.63% (As of Mar. 2015)

Gross Margin is calculated as gross profit divided by its revenue. CSX Corp's gross profit for the three months ended in Mar. 2015 was $2,017 Mil. CSX Corp's revenue for the three months ended in Mar. 2015 was $3,027 Mil. Therefore, CSX Corp's Gross Margin for the quarter that ended in Mar. 2015 was 66.63%.

Warning Sign:

CSX Corp gross margin has been in long term decline. The average rate of decline per year is -1.1%.

CSX' s 10-Year Gross Margin Range
Min: 5.52   Max: 69.83
Current: 65.61

5.52
69.83

During the past 13 years, the highest Gross Margin of CSX Corp was 69.83%. The lowest was 5.52%. And the median was 58.33%.

CSX's Gross Marginis ranked lower than
100% of the Companies
in the Global Railroads industry.

( Industry Median: vs. CSX: 65.61 )

CSX Corp had a gross margin of 70.37% for the quarter that ended in Mar. 2015 => Durable competitive advantage

The 3-Year average Growth Rate of Gross Margin for CSX Corp was -1.10% per year.


Definition

Gross Margin is the percentage of Gross Profit out of sales or Revenue.

CSX Corp's Gross Margin for the fiscal year that ended in Dec. 2014 is calculated as

Gross Margin (A: Dec. 2014 )=Gross Profit (A: Dec. 2014 ) / Revenue (A: Dec. 2014 )
=8569 / 12669
=(Revenue - Cost of Goods Sold) / Revenue
=(12669 - 4100) / 12669
=67.64 %

CSX Corp's Gross Margin for the quarter that ended in Mar. 2015 is calculated as

Gross Margin (Q: Mar. 2015 )=Gross Profit (Q: Mar. 2015 ) / Revenue (Q: Mar. 2015 )
=2130 / 3027
=(Revenue - Cost of Goods Sold) / Revenue
=(3027 - 897) / 3027
=70.37 %

* 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

CSX Corp had a gross margin of 70.37% for the quarter that ended in Mar. 2015 => Durable competitive advantage


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.


Related Terms

Operating Margin, Cost of Goods Sold, Gross Profit, Revenue


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

CSX Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Gross Margin 60.3665.4869.8366.4368.5065.5863.5964.1264.1564.26

CSX Corp Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
Gross Margin 63.4464.7065.4363.9262.5760.9664.5265.5765.7966.63
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