American Water Works Co's Return on Invested Capital Insights

American Water Works Co's Return on Invested Capital Insights

According to Benzinga Pro, during Q2, American Water Works Co AWK earned $218.00 million, a 37.97% increase from the preceding quarter. American Water Works Co also posted a total of $937.00 million in sales, a 11.28% increase since Q1. In Q1, American Water Works Co earned $158.00 million, and total sales reached $842.00 million.

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 Q2, American Water Works Co posted an ROIC of 1.35%.

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, American Water Works Co posted an ROIC of 1.35%.

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 American Water Works Co, the positive return on invested capital ratio of 1.35% 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

American Water Works Co reported Q2 earnings per share at $1.2/share, which beat analyst predictions of $1.16/share.

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

Posted In: BZI-ROCEEarnings