BorgWarner's Return on Invested Capital Insights

According to Benzinga Pro, during Q1, BorgWarner BWA earned $224.00 million, a 45.45% increase from the preceding quarter. BorgWarner also posted a total of $3.87 billion in sales, a 5.99% increase since Q4. BorgWarner earned $154.00 million, and sales totaled $3.65 billion in Q4.

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 Q1, BorgWarner 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 Q1, BorgWarner 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 BorgWarner, 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.

Analyst Predictions

BorgWarner reported Q1 earnings per share at $1.05/share, which beat analyst predictions of $0.87/share.

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