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Newfield Exploration Co  (NYSE:NFX) Gross Profit: $1,057 Mil (TTM As of Jun. 2017)

Newfield Exploration Co's gross profit for the three months ended in Jun. 2017 was $260 Mil. Newfield Exploration Co's gross profit for the trailing twelve months (TTM) ended in Jun. 2017 was $1,057 Mil.

Gross Margin % is calculated as gross profit divided by its revenue. Newfield Exploration Co's gross profit for the three months ended in Jun. 2017 was $260 Mil. Newfield Exploration Co's Revenue for the three months ended in Jun. 2017 was $402 Mil. Therefore, Newfield Exploration Co's Gross Margin % for the quarter that ended in Jun. 2017 was 64.68%.

Newfield Exploration Co had a gross margin of 64.68% for the quarter that ended in Jun. 2017 => Durable competitive advantage

During the past 13 years, the highest Gross Margin % of Newfield Exploration Co was 75.55%. The lowest was 62.09%. And the median was 73.59%.

Warning Sign:

Newfield Exploration Co gross margin has been in long term decline. The average rate of decline per year is -3.8%.


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Newfield Exploration Co Annual Data

Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16
Gross Profit Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1,149.00 1,367.00 1,692.00 1,014.00 914.00

Newfield Exploration Co Quarterly Data

Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17
Gross Profit Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 242.00 248.00 274.00 275.00 260.00

Competitive Comparison
* 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.


Calculation

Gross Profit is the different between the sale prices and the cost of buying or producing the goods.

Newfield Exploration Co's Gross Profit for the fiscal year that ended in Dec. 2016 is calculated as

Gross Profit (A: Dec. 2016 )=Revenue - Cost of Goods Sold
=1472 - 558
=914

Newfield Exploration Co's Gross Profit for the quarter that ended in Jun. 2017 is calculated as

Gross Profit (Q: Jun. 2017 )=Revenue - Cost of Goods Sold
=402 - 142
=260

Gross Profit for the trailing twelve months (TTM) ended in Jun. 2017 was 248 (Sep. 2016 ) + 274 (Dec. 2016 ) + 275 (Mar. 2017 ) + 260 (Jun. 2017 ) = $1,057 Mil.

Gross Profit is the numerator in the calculation of Gross Margin:

Newfield Exploration Co's Gross Margin % for the quarter that ended in Jun. 2017 is calculated as

Gross Margin % (Q: Jun. 2017 )=Gross Profit (Q: Jun. 2017 ) / Revenue (Q: Jun. 2017 )
=(Revenue - Cost of Goods Sold) / Revenue
=260 / 402
=64.68 %

* 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

Newfield Exploration Co had a gross margin of 64.68% for the quarter that ended in Jun. 2017 => Durable competitive advantage


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