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GuruFocus has detected 6 Warning Signs with Corning Inc $GLW.
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Corning Inc (NYSE:GLW)
Gross Profit
$3,939 Mil (TTM As of Mar. 2017)

Corning Inc's gross profit for the three months ended in Mar. 2017 was $957 Mil. Corning Inc's gross profit for the trailing twelve months (TTM) ended in Mar. 2017 was $3,939 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Corning Inc's gross profit for the three months ended in Mar. 2017 was $957 Mil. Corning Inc's revenue for the three months ended in Mar. 2017 was $2,375 Mil. Therefore, Corning Inc's Gross Margin for the quarter that ended in Mar. 2017 was 40.29%.

Corning Inc had a gross margin of 40.29% for the quarter that ended in Mar. 2017 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Corning Inc was 46.91%. The lowest was 38.80%. And the median was 42.11%.

Warning Sign:

Corning Inc gross margin has been in long term decline. The average rate of decline per year is -2.1%.


Definition

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

Corning Inc'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
=9390 - 5644
=3,746

Corning Inc's Gross Profit for the quarter that ended in Mar. 2017 is calculated as

Gross Profit (Q: Mar. 2017 )=Revenue - Cost of Goods Sold
=2375 - 1418
=957

Corning Inc Gross Profit for the trailing twelve months (TTM) ended in Mar. 2017 was 951 (Jun. 2016 ) + 1041 (Sep. 2016 ) + 990 (Dec. 2016 ) + 957 (Mar. 2017 ) = $3,939 Mil.

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

Corning Inc's Gross Margin for the quarter that ended in Mar. 2017 is calculated as

Gross Margin (Q: Mar. 2017 )=Gross Profit (Q: Mar. 2017 ) / Revenue (Q: Mar. 2017 )
=(Revenue - Cost of Goods Sold) / Revenue
=957 / 2375
=40.29 %

* 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

Corning Inc had a gross margin of 40.29% for the quarter that ended in Mar. 2017 => Durable competitive advantage


Related Terms

Cost of Goods Sold, Gross Margin, Revenue


Historical Data

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

Corning Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Gross_Profit 2,7492,7382,0933,0493,5763,3193,3244,0523,6533,746

Corning Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
Gross_Profit 9969299758928577649511,041990957
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