Gross Margin % is calculated as gross profit divided by its revenue. Meritor's Gross Profit for the
three
months ended in Mar. 2022 was $137 Mil. Meritor's Revenue for the
three
months ended in Mar. 2022 was $1,154 Mil. Therefore, Meritor's Gross Margin % for the quarter that ended in Mar. 2022 was 11.87%.
Warning Sign:
Meritor Inc gross margin has been in long-term decline. The average rate of decline per year is -3.2%.
The historical rank and industry rank for Meritor's Gross Margin % or its related term are showing as below:
MTOR'
s Gross Margin % Range Over the Past 10 Years
Min: 10.76 Med: 13.18 Max: 14.96
Current: 12.34
During the past 13 years, the highestGross Margin % of Meritor was 14.96%. The lowest was 10.76%. And the median was 13.18%.
MTOR's Gross Margin % is not ranked
in the Vehicles & Parts industry.
Industry Median: 19.36
vs MTOR: 12.34
Meritor had a gross margin of 11.87% for the quarter that ended in Mar. 2022 => No sustainable competitive advantage
The 5-Year average Growth Rate of Gross Margin for Meritor was -3.20% per year.
Meritor Gross Margin % Historical Data
The historical data trend for Meritor'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 Meritor's Gross Margin %
For the Auto Parts subindustry, Meritor'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.
Meritor's Gross Margin % Distribution in the Vehicles & Parts Industry
For the Vehicles & Parts industry and Consumer Cyclical sector, Meritor's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Meritor'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.
Meritor (NYSE:MTOR) 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
Meritor had a gross margin of 11.87% for the quarter that ended in Mar. 2022 => 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.
Meritor Gross Margin % Related Terms
Thank you for viewing the detailed overview of Meritor's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
Meritor Inc is a manufacturer of automobile parts for commercial vehicles and industrial markets. The company offers drivetrain, axle, brake, and suspension solutions for commercial trucks, trailers, buses, coaches, off-highway machinery, and defence contractors. The company serves original equipment markets as well as the aftermarket segment for the transportation and industrial sectors. Meritor generates the majority of its revenue from its commercial truck and industrial segment. Geographically, sales are focused on North American markets.
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