Skip to main content

Market Overview

Return on Capital Employed Overview: Schnitzer Steel Indus

Share:

After pulling data from Benzinga Pro it seems like during Q3, Schnitzer Steel Indus (NASDAQ:SCHN) earned $80.43 million, a 38.36% increase from the preceding quarter. Schnitzer Steel Indus also posted a total of $820.72 million in sales, a 36.76% increase since Q2. Schnitzer Steel Indus earned $58.13 million, and sales totaled $600.11 million in Q2.

What Is ROCE?

Changes in earnings and sales indicate shifts in Schnitzer Steel Indus'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, Schnitzer Steel Indus posted an ROCE of 0.1%.

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 Schnitzer Steel Indus 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 Schnitzer Steel Indus, 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.

Upcoming Earnings Estimate

Schnitzer Steel Indus reported Q3 earnings per share at $2.2/share, which beat analyst predictions of $2.08/share.

 

Related Articles (SCHN)

View Comments and Join the Discussion!

Posted-In: BZI-ROCEEarnings