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According to Benzinga Pro data Gentherm (NASDAQ:THRM) posted a 41.41% decrease in earnings from Q4. Sales, however, increased by 7.83% over the previous quarter to $267.66 million. Despite the increase in sales this quarter, the decrease in earnings may suggest Gentherm is not utilizing their capital as effectively as possible. Gentherm reached earnings of $20.05 million and sales of $248.23 million in Q4.
Why Is ROIC Significant?
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Earnings data without context is not clear and can difficult to base trading decisions on. Return on Invested Capital (ROIC) helps to filter signal from noise by measuring yearly pre-tax profit relative to invested capital by a business. Generally, a higher ROIC suggests successful growth of a company and is a sign of higher earnings per share in the future. In Q1, Gentherm posted an ROIC of 2.07%.
It is important to keep in mind that ROIC evaluates past performance and is not used as a predictive tool. It is a good measure of a company's recent performance, but does not account for factors that could affect earnings and sales in the near future.
Earnings data without context is not clear and can difficult to base trading decisions on. Return on Invested Capital (ROIC) helps to filter signal from noise by measuring yearly pre-tax profit relative to invested capital by a business. Generally, a higher ROIC suggests successful growth of a company and is a sign of higher earnings per share in the future. In Q1, Gentherm posted an ROIC of 2.07%.
It is important to keep in mind that ROIC evaluates past performance and is not used as a predictive tool. It is a good measure of a company's recent performance, but does not account for factors that could affect earnings and sales in the near future.
For Gentherm, the positive return on invested capital ratio of 2.07% suggests that management is allocating their capital effectively. Effective capital allocation is a positive indicator that a company will achieve more durable success and favorable long-term returns.
Upcoming Earnings Estimate
Gentherm reported Q1 earnings per share at $0.41/share, which did not meet analyst predictions of $0.47/share.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.