Market Overview

ROCE Insights For Bristol-Myers Squibb

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Looking at Q2, Bristol-Myers Squibb (NYSE: BMY) earned $891.00 million, a 3.73% increase from the preceding quarter. Bristol-Myers Squibb's sales decreased to $10.13 billion, a 6.05% change since Q1. In Q1, Bristol-Myers Squibb brought in $10.78 billion in sales but only earned $859.00 million.

What Is Return On Capital Employed?

Changes in earnings and sales indicate shifts in Bristol-Myers Squibb’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 Q2, Bristol-Myers Squibb posted an ROCE of 0.02%.

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 Bristol-Myers Squibb 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.

In Bristol-Myers Squibb's case, the positive ROCE ratio will be something investors pay attention to before making long-term financial decisions.

Q2 Earnings Recap

Bristol-Myers Squibb reported Q2 earnings per share at $1.63/share, which beat analyst predictions of $1.48/share.

 

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Posted-In: Earnings News