Market Overview

ROCE Insights For General Electric

Share:

General Electric (NYSE:GE) posted a 107.91% decrease in earnings from Q2. Sales, however, increased by 9.39% over the previous quarter to $19.42 billion. Despite the increase in sales this quarter, the decrease in earnings may suggest General Electric is not utilizing their capital as effectively as possible. General Electric collected $17.75 billion in revenue during Q2, but reported earnings showed a $2.86 billion loss.

What Is Return On Capital Employed?

Changes in earnings and sales indicate shifts in General Electric'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 Q3, General Electric posted an ROCE of 0.01%.

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 General Electric's case, the positive ROCE ratio will be something investors pay attention to before making long-term financial decisions.

Q3 Earnings Insight

General Electric reported Q3 earnings per share at $0.06/share, which beat analyst predictions of $-0.04/share.

 

Related Articles (GE)

View Comments and Join the Discussion!

Posted-In: BZI-ROCEEarnings News

Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com