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Esterline Technologies Corp  (NYSE:ESL) Gross Profit: $684 Mil (TTM As of Jun. 2017)

Esterline Technologies Corp's gross profit for the three months ended in Jun. 2017 was $171 Mil. Esterline Technologies Corp's gross profit for the trailing twelve months (TTM) ended in Jun. 2017 was $684 Mil.

Gross Margin % is calculated as gross profit divided by its revenue. Esterline Technologies Corp's gross profit for the three months ended in Jun. 2017 was $171 Mil. Esterline Technologies Corp's Revenue for the three months ended in Jun. 2017 was $504 Mil. Therefore, Esterline Technologies Corp's Gross Margin % for the quarter that ended in Jun. 2017 was 33.87%.

Esterline Technologies Corp had a gross margin of 33.87% for the quarter that ended in Jun. 2017 => Competition eroding margins

During the past 13 years, the highest Gross Margin % of Esterline Technologies Corp was 37.31%. The lowest was 30.91%. And the median was 33.52%.

Warning Sign:

Esterline Technologies Corp gross margin has been in long term decline. The average rate of decline per year is -1.4%.


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.

Esterline Technologies Corp Annual Data

Oct07 Oct08 Oct09 Oct10 Oct11 Oct12 Oct13 Oct14 Sep15 Sep16
Gross Profit Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 677.89 704.71 720.62 589.39 661.25

Esterline Technologies Corp Quarterly Data

Oct12 Jan13 Apr13 Jul13 Oct13 Jan14 Apr14 Jul14 Oct14 Jan15 Apr15 Jul15 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 173.58 193.77 144.05 175.92 170.63

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.

Esterline Technologies Corp's Gross Profit for the fiscal year that ended in Sep. 2016 is calculated as

Gross Profit (A: Sep. 2016 )=Revenue - Cost of Goods Sold
=1992.631 - 1331.386
=661

Esterline Technologies Corp's Gross Profit for the quarter that ended in Jun. 2017 is calculated as

Gross Profit (Q: Jun. 2017 )=Revenue - Cost of Goods Sold
=503.753 - 333.124
=171

Gross Profit for the trailing twelve months (TTM) ended in Jun. 2017 was 193.769 (Sep. 2016 ) + 144.047 (Dec. 2016 ) + 175.919 (Mar. 2017 ) + 170.629 (Jun. 2017 ) = $684 Mil.

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

Esterline Technologies Corp'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
=171 / 503.753
=33.87 %

* 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

Esterline Technologies Corp had a gross margin of 33.87% for the quarter that ended in Jun. 2017 => Competition eroding margins


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