Switch to:
Seagate Technology PLC (NAS:STX)
Gross Margin
27.77% (As of Sep. 2014)

Gross Margin is calculated as gross profit divided by its revenue. Seagate Technology PLC's gross profit for the three months ended in Sep. 2014 was $1,051 Mil. Seagate Technology PLC's revenue for the three months ended in Sep. 2014 was $3,785 Mil. Therefore, Seagate Technology PLC's Gross Margin for the quarter that ended in Sep. 2014 was 27.77%.

STX' s 10-Year Gross Margin Range
Min: 14.38   Max: 31.35
Current: 27.97

14.38
31.35

During the past 13 years, the highest Gross Margin of Seagate Technology PLC was 31.35%. The lowest was 14.38%. And the median was 25.22%.

STX's Gross Marginis ranked lower than
100% of the Companies
in the Global Data Storage industry.

( Industry Median: vs. STX: 27.97 )

Seagate Technology PLC had a gross margin of 27.77% for the quarter that ended in Sep. 2014 => Competition eroding margins

The 3-Year average Growth Rate of Gross Margin for Seagate Technology PLC was 11.30% per year.


Definition

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

Seagate Technology PLC's Gross Margin for the fiscal year that ended in Jun. 2014 is calculated as

Gross Margin (A: Jun. 2014 )=Gross Profit (A: Jun. 2014 ) / Revenue (A: Jun. 2014 )
=3846 / 13724
=(Revenue - Cost of Goods Sold) / Revenue
=(13724 - 9878) / 13724
=28.02 %

Seagate Technology PLC's Gross Margin for the quarter that ended in Sep. 2014 is calculated as

Gross Margin (Q: Sep. 2014 )=Gross Profit (Q: Sep. 2014 ) / Revenue (Q: Sep. 2014 )
=1051 / 3785
=(Revenue - Cost of Goods Sold) / Revenue
=(3785 - 2734) / 3785
=27.77 %

* 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

Seagate Technology PLC had a gross margin of 27.77% for the quarter that ended in Sep. 2014 => Competition eroding margins


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.

Seagate Technology PLC Annual Data

Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14
Gross Margin 22.1523.2119.2325.2214.3828.1219.5631.3527.4528.02

Seagate Technology PLC Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Gross Margin 33.1128.4327.0426.8927.4227.9427.9828.1628.0227.77
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)
Free 7-day Trial
FEEDBACK