Market Overview

ROCE Insights For Hyatt Hotels

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During Q1, Hyatt Hotels (NYSE: H) brought in sales totaling $993.00 million. However, earnings decreased 133.41%, resulting in a loss of $138.00 million. Hyatt Hotels earned $413.00 million and $1.27 billion in sales in Q4.

What Is ROCE?

Changes in earnings and sales indicate shifts in Hyatt Hotels’s Return on Capital Employed, a measure of yearly pre-tax profit relative to capital employed in a business. Generally, a higher ROCE suggests successful growth in a company and is a sign of higher earnings per share for shareholders in the future. In Q1, Hyatt Hotels posted an ROCE of 0.0%.

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 Hyatt Hotels 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 lead to higher returns and earnings per share growth. For Hyatt Hotels, the return on capital employed ratio shows the number of assets can actually help the company achieve higher returns, an important note investors will take into account when gauging the payoff from long-term financing strategies.

Analyst Predictions

Analysts expect EPS to decrease to $-1.34/share by the end of the quarter.

 

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Posted-In: Earnings News Travel General