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Harbinger Group Inc (NYSE:HRG)
Gross Margin
54.20% (As of Jun. 2014)

Gross Margin is calculated as gross profit divided by its revenue. Harbinger Group Inc's gross profit for the three months ended in Jun. 2014 was $867 Mil. Harbinger Group Inc's revenue for the three months ended in Jun. 2014 was $1,599 Mil. Therefore, Harbinger Group Inc's Gross Margin for the quarter that ended in Jun. 2014 was 54.20%.

HRG' s 10-Year Gross Margin Range
Min: 23.38   Max: 52.31
Current: 51.18

23.38
52.31

During the past 7 years, the highest Gross Margin of Harbinger Group Inc was 52.31%. The lowest was 23.38%. And the median was 36.90%.

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

( Industry Median: vs. HRG: 51.18 )

Harbinger Group Inc had a gross margin of 54.20% for the quarter that ended in Jun. 2014 => Durable competitive advantage

The 3-Year average Growth Rate of Gross Margin for Harbinger Group Inc was 0.00% per year.


Definition

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

Harbinger Group Inc's Gross Margin for the fiscal year that ended in Sep. 2013 is calculated as

Gross Margin (A: Sep. 2013 )=Gross Profit (A: Sep. 2013 ) / Revenue (A: Sep. 2013 )
=2804.1 / 5543.4
=(Revenue - Cost of Goods Sold) / Revenue
=(5543.4 - 2739.3) / 5543.4
=50.58 %

Harbinger Group Inc'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 )
=866.8 / 1599.4
=(Revenue - Cost of Goods Sold) / Revenue
=(1599.4 - 732.6) / 1599.4
=54.20 %

* 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

Harbinger Group Inc had a gross margin of 54.20% for the quarter that ended in Jun. 2014 => 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.

Harbinger Group Inc Annual Data

Sep95Sep96Sep97Sep98Sep11Sep12Sep13
Gross Margin 0.000.000.0026.1125.5323.3836.9040.8252.3150.58

Harbinger Group Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Gross Margin 56.0247.3353.8252.3852.2648.5549.4751.2949.3654.20
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