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Micron Technology Inc (NAS:MU)
Gross Margin
18.00% (As of Aug. 2016)

Gross Margin is calculated as gross profit divided by its revenue. Micron Technology Inc's gross profit for the three months ended in Aug. 2016 was $579 Mil. Micron Technology Inc's revenue for the three months ended in Aug. 2016 was $3,217 Mil. Therefore, Micron Technology Inc's Gross Margin for the quarter that ended in Aug. 2016 was 18.00%.

MU' s Gross Margin Range Over the Past 10 Years
Min: -9.16   Max: 33.24
Current: 20.2

-9.16
33.24

During the past 13 years, the highest Gross Margin of Micron Technology Inc was 33.24%. The lowest was -9.16%. And the median was 20.10%.

MU's Gross Margin is ranked lower than
63% of the 859 Companies
in the Global Semiconductor Memory industry.

( Industry Median: 26.51 vs. MU: 20.20 )

Micron Technology Inc had a gross margin of 18.00% for the quarter that ended in Aug. 2016 => No sustainable competitive advantage

The 5-Year average Growth Rate of Gross Margin for Micron Technology Inc was 10.70% per year.


Definition

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

Micron Technology Inc's Gross Margin for the fiscal year that ended in Aug. 2016 is calculated as

Gross Margin (A: Aug. 2016 )=Gross Profit (A: Aug. 2016 ) / Revenue (A: Aug. 2016 )
=2505 / 12399
=(Revenue - Cost of Goods Sold) / Revenue
=(12399 - 9894) / 12399
=20.20 %

Micron Technology Inc's Gross Margin for the quarter that ended in Aug. 2016 is calculated as

Gross Margin (Q: Aug. 2016 )=Gross Profit (Q: Aug. 2016 ) / Revenue (Q: Aug. 2016 )
=579 / 3217
=(Revenue - Cost of Goods Sold) / Revenue
=(3217 - 2638) / 3217
=18.00 %

* 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

Micron Technology Inc had a gross margin of 18.00% for the quarter that ended in Aug. 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.

Micron Technology Inc Annual Data

Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14Aug15Aug16
Gross Margin 18.95-0.94-9.1632.0020.0011.7620.3633.2432.2120.20

Micron Technology Inc Quarterly Data

May14Aug14Nov14Feb15May15Aug15Nov15Feb16May16Aug16
Gross Margin 34.3532.7735.8233.7331.2026.9425.3419.7317.1818.00
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