Looking Into Amicus Therapeutics's Return On Capital Employed

During Q1, Amicus Therapeutics FOLD brought in sales totaling $66.40 million. However, earnings decreased 18.31%, resulting in a loss of $52.58 million. In Q4, Amicus Therapeutics brought in $70.57 million in sales but lost $64.37 million in earnings.

What Is Return On Capital Employed?

Changes in earnings and sales indicate shifts in Amicus Therapeutics's Return on Capital Employed, a measure of yearly pre-tax profit relative to capital employed by a business. Generally, a higher ROCE suggests successful growth of a company and is a sign of higher earnings per share in the future. In Q1, Amicus Therapeutics posted an ROCE of -0.21%.

It is important to keep in mind ROCE evaluates past performance and is not used as a predictive tool. It is a good measure of a company's recent performance, but several factors could affect earnings and sales in the near future.

ROCE is an important metric for the comparison of similar companies. A relatively high ROCE shows Amicus Therapeutics is potentially operating at a higher level of efficiency than other companies in its industry. If the company is generating high profits with its current level of capital, some of that money can be reinvested in more capital which will generally lead to higher returns and earnings per share growth.

For Amicus Therapeutics, the return on capital employed ratio shows the current amount of assets may not actually be helping the company achieve higher returns, a note many investors will take into account when making long-term financial decisions.

Q1 Earnings Insight

Amicus Therapeutics reported Q1 earnings per share at $-0.25/share, which did not meet analyst predictions of $-0.24/share.

Market News and Data brought to you by Benzinga APIs
Posted In: NewsBZI-ROCE
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!