Gross Margin % is calculated as gross profit divided by its revenue. Alcoa's Gross Profit for the
three
months ended in Mar. 2024 was $195 Mil. Alcoa's Revenue for the
three
months ended in Mar. 2024 was $2,599 Mil. Therefore, Alcoa's Gross Margin % for the quarter that ended in Mar. 2024 was 7.50%.
Warning Sign:
Alcoa Corp gross margin has been in long-term decline. The average rate of decline per year is -15.4%.
The historical rank and industry rank for Alcoa's Gross Margin % or its related term are showing as below:
AA'
s Gross Margin % Range Over the Past 10 Years
Min: 6.37 Med: 18.73 Max: 24.99
Current: 6.37
During the past 11 years, the highestGross Margin % of Alcoa was 24.99%. The lowest was 6.37%. And the median was 18.73%.
AA's Gross Margin % is ranked worse than 77.2% of 706
companies
in the Metals & Mining industry
Industry Median: 19.565
vs AA: 6.37
Alcoa had a gross margin of 7.50% for the quarter that ended in Mar. 2024 => No sustainable competitive advantage
The 5-Year average Growth Rate of Gross Margin for Alcoa was -15.40% per year.
Alcoa Gross Margin % Historical Data
The historical data trend for Alcoa's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Aluminum subindustry, Alcoa's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* 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. Note that "N/A" values will not show up in the chart.
Alcoa Gross Margin % Distribution
For the Metals & Mining industry and Basic Materials sector, Alcoa's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Alcoa's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange 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.
Alcoa (NYSE:AA) Gross Margin % 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
Alcoa had a gross margin of 7.50% for the quarter that ended in Mar. 2024 => 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.
Alcoa Gross Margin % Related Terms
Thank you for viewing the detailed overview of Alcoa's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
Alcoa Corp is a vertically integrated aluminum company whose operations include bauxite mining, alumina refining, and the manufacture of primary aluminum. It is the world's largest bauxite miner and alumina refiner by production volume, and its profits are closely tied to prevailing commodity prices along the aluminum supply chain. The company segments include Bauxite; Alumina and Aluminum. It generates maximum revenue from the Aluminum segment. Geographically, it derives a majority of its revenue from the United States.
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