Market Cap : 204.02 B | Enterprise Value : 391.29 B | PE Ratio : | PB Ratio : 1.28 |
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Gross Margin % is calculated as gross profit divided by its revenue. AT&T's Gross Profit for the three months ended in Dec. 2020 was $22,781 Mil. AT&T's Revenue for the three months ended in Dec. 2020 was $45,691 Mil. Therefore, AT&T's Gross Margin % for the quarter that ended in Dec. 2020 was 49.86%.
During the past 13 years, the highest Gross Margin % of AT&T was 60.24%. The lowest was 51.53%. And the median was 53.95%.
AT&T had a gross margin of 49.86% for the quarter that ended in Dec. 2020 => Durable competitive advantage
The 5-Year average Growth Rate of Gross Margin for AT&T was 0.00% per year.
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
* The bar in red indicates where AT&T's Gross Margin % falls into.
Gross Margin is the percentage of Gross Profit out of sales or Revenue.
AT&T's Gross Margin for the fiscal year that ended in Dec. 2020 is calculated as
Gross Margin % (A: Dec. 2020 ) | = | Gross Profit (A: Dec. 2020 ) | / | Revenue (A: Dec. 2020 ) |
= | 91840 | / | 171760 | |
= | (Revenue - Cost of Goods Sold) | / | Revenue | |
= | (171760 - 79920) | / | 171760 | |
= | 53.47 % |
AT&T's Gross Margin for the quarter that ended in Dec. 2020 is calculated as
Gross Margin % (Q: Dec. 2020 ) | = | Gross Profit (Q: Dec. 2020 ) | / | Revenue (Q: Dec. 2020 ) |
= | 22781 | / | 45691 | |
= | (Revenue - Cost of Goods Sold) | / | Revenue | |
= | (45691 - 22910) | / | 45691 | |
= | 49.86 % |
* 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.
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
AT&T had a gross margin of 49.86% for the quarter that ended in Dec. 2020 => Durable competitive advantage
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.
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