Allied Motion Earnings Perspective: Return On Invested Capital

Pulled from Benzinga Pro data, Allied Motion AMOT posted Q4 earnings of $1.56 million, an increase from Q3 of 73.86%. Sales dropped to $96.79 million, a 6.49% decrease between quarters. Allied Motion reached earnings of $5.97 million and sales of $103.51 million in Q3.

What Is Return On Invested Capital?

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 Q4, Allied Motion posted an ROIC of 3.19%.

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 Q4, Allied Motion posted an ROIC of 3.19%.

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 Allied Motion, the positive return on invested capital ratio of 3.19% suggests that management is allocating their capital effectively. Effective capital allocation is a positive indicator that a company will achieve more durable success and favorable long-term returns.

Upcoming Earnings Estimate

Allied Motion reported Q4 earnings per share at $0.2/share, which did not meet analyst predictions of $0.24/share.

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