Allegion's Return on Invested Capital Insights

Allegion's Return on Invested Capital Insights

According to Benzinga Pro, during Q2, Allegion ALLE earned $115.20 million, a 23.74% increase from the preceding quarter. Allegion also posted a total of $773.10 million in sales, a 6.84% increase since Q1. In Q1, Allegion earned $93.10 million, and total sales reached $723.60 million.

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, Allegion posted an ROIC of 5.24%.

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, Allegion posted an ROIC of 5.24%.

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 Allegion, the positive return on invested capital ratio of 5.24% 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

Allegion reported Q2 earnings per share at $1.37/share, which beat analyst predictions of $1.33/share.

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

Posted In: BZI-ROCEEarnings