Return On Capital Employed Overview: FuelCell Energy

During Q3, FuelCell Energy's FCEL reported sales totaled $18.73 million. Despite a 32.18% in earnings, the company posted a loss of $10.76 million. FuelCell Energy collected $18.88 million in revenue during Q2, but reported earnings showed a $8.14 million loss.

What Is ROCE?

Changes in earnings and sales indicate shifts in FuelCell Energy’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 Q3, FuelCell Energy posted an ROCE of -0.07%.

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.

Return on Capital Employed is an important measurement of efficiency and a useful tool when comparing companies that operate in the same industry. A relatively high ROCE indicates a company may be generating profits that can be reinvested into more capital, leading to higher returns and growing EPS for shareholders.

In FuelCell Energy's case, the ROCE ratio shows the amount of assets may not be helping the company achieve higher returns. Investors may take this into account before making any long-term financial decisions.

Q3 Earnings Insight

FuelCell Energy reported Q3 earnings per share at $-0.07/share, which did not meet analyst predictions of $-0.06/share.