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However, many traditional grocery banners missed this sizeable drop in gross margin because of their internal focus.
For that reason, he's already modeling a drop in gross margin to 31.9% in Q4 from 36.4% in Q1, with a 32% margin in 2012.
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A warning that December quarter results would show a 400 basis point drop in gross margins.
Shares of Intel fell more than 1% after the company lowered its earnings forecast, blaming a drop in gross margins.
That helped drive down the average selling price for AMD's server chips in the fourth quarter, analysts say, contributing to a drop in gross margins at AMD to 36% from 51% during the prior quarter.
Dec. 23: TPG dropped out from the bidding process, citing "concerns about the negative trends in gross margin and earnings in the PC business and the decline in the company's operating performance, including the decline in its operating margins".
"As a result the worry was that the published increase in gross margin was probably overstated".
This is due to my 40.6% gross margin since every 10 basis points in gross margin is worth $0.01 in EPS.
This increase in gross margin is important to profitability.
Gross margins over 20 years and year-to-year variation in gross margins were assessed.
Industry analysts said that while the company should not welcome any decrease in gross margins, this particular case was not as damaging as some circumstances -- for instance, if Sun were dropping prices for its servers amid a price war.
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