Carpenter Technology's Return on Invested Capital Insights

Carpenter Technology's Return on Invested Capital Insights

Carpenter Technology CRS brought in sales totaling $396.00 million during Q2 according to data provided by Benzinga Pro. However, earnings decreased 98.65%, resulting in a loss of $29.40 million. Carpenter Technology collected $387.60 million in revenue during Q1, but reported earnings showed a $14.80 million loss.

What Is ROIC?

Return on Invested Capital is a measure of yearly pre-tax profit relative to capital invested by a business. Changes in earnings and sales indicate shifts in a company's ROIC. A higher ROIC 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 ROIC suggests the opposite. In Q2, Carpenter Technology posted an ROIC of -0.93%.

Keep in mind, while ROIC 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 Invested Capital is a measure of yearly pre-tax profit relative to capital invested by a business. Changes in earnings and sales indicate shifts in a company's ROIC. A higher ROIC 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 ROIC suggests the opposite. In Q2, Carpenter Technology posted an ROIC of -0.93%.

Keep in mind, while ROIC 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.

For Carpenter Technology, a negative ROIC ratio of -0.93% suggests that management may not be effectively allocating their capital. Effective capital allocation is a positive indicator that a company will achieve more durable success and favorable long-term returns; poor capital allocation can be a leech on the performance of a company over time.

Upcoming Earnings Estimate

Carpenter Technology reported Q2 earnings per share at $-0.58/share, which beat analyst predictions of $-0.62/share.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

Posted In: BZI-ROCEEarnings