Switch to:
Halliburton Co (NYSE:HAL)
Gross Margin
2.69% (As of Jun. 2016)

Gross Margin is calculated as gross profit divided by its revenue. Halliburton Co's gross profit for the three months ended in Jun. 2016 was $103 Mil. Halliburton Co's revenue for the three months ended in Jun. 2016 was $3,835 Mil. Therefore, Halliburton Co's Gross Margin for the quarter that ended in Jun. 2016 was 2.69%.

Warning Sign:

Halliburton Co gross margin has been in long term decline. The average rate of decline per year is -9.2%.

HAL' s Gross Margin Range Over the Past 10 Years
Min: 6.33   Max: 27.24
Current: 6.33

6.33
27.24

During the past 13 years, the highest Gross Margin of Halliburton Co was 27.24%. The lowest was 6.33%. And the median was 16.91%.

HAL's Gross Margin is ranked lower than
85% of the 253 Companies
in the Global Oil & Gas Equipment & Services industry.

( Industry Median: 24.00 vs. HAL: 6.33 )

Halliburton Co had a gross margin of 2.69% for the quarter that ended in Jun. 2016 => No sustainable competitive advantage

The 5-Year average Growth Rate of Gross Margin for Halliburton Co was -9.20% per year.


Definition

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

Halliburton Co'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 )
=5211 / 32870
=(Revenue - Cost of Goods Sold) / Revenue
=(32870 - 27659) / 32870
=15.85 %

Halliburton Co's Gross Margin for the quarter that ended in Jun. 2016 is calculated as

Gross Margin (Q: Jun. 2016 )=Gross Profit (Q: Jun. 2016 ) / Revenue (Q: Jun. 2016 )
=103 / 3835
=(Revenue - Cost of Goods Sold) / Revenue
=(3835 - 3732) / 3835
=2.69 %

* 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

Halliburton Co had a gross margin of 2.69% for the quarter that ended in Jun. 2016 => No sustainable 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 local exchange's currency.

Halliburton Co Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Gross Margin 27.2424.5023.1414.9617.9620.2115.5615.2115.8510.66

Halliburton Co Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
Gross Margin 15.9417.3915.6210.8511.599.7310.356.502.694.46
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)
FEEDBACK