Looking into W&T Offshore's Return on Capital Employed

Loading...
Loading...

Pulled from Benzinga Pro data W&T Offshore WTI posted a 15.31% decrease in earnings from Q1. Sales, however, increased by 5.72% over the previous quarter to $132.83 million. Despite the increase in sales this quarter, the decrease in earnings may suggest W&T Offshore is not utilizing their capital as effectively as possible. In Q1, W&T Offshore earned $39.63 million and total sales reached $125.65 million.

What Is ROCE?

Return on Capital Employed is a measure of yearly pre-tax profit relative to capital employed by a business. Changes in earnings and sales indicate shifts in a company's ROCE. A higher ROCE is generally representative of successful growth of a company and is a sign of higher earnings per share in the future. A low or negative ROCE suggests the opposite. In Q2, W&T Offshore posted an ROCE of -0.13%.

Keep in mind, while ROCE is a good measure of a company's recent performance, it is not a highly reliable predictor of a company's earnings or 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 W&T Offshore'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.

Analyst Predictions

W&T Offshore reported Q2 earnings per share at $0.02/share, which did not meet analyst predictions of $0.07/share.

Loading...
Loading...
Date
ticker
name
Actual EPS
EPS Surprise
Actual Rev
Rev Surprise
Posted In: EarningsBZI-ROCE
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...