Benzinga Pro data, Elanco Animal Health (NYSE:ELAN) reported Q2 sales of $1.18 billion. Earnings fell to a loss of $22.00 million, resulting in a 145.83% decrease from last quarter. Elanco Animal Health earned $48.00 million, and sales totaled $1.23 billion in Q1.

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, Elanco Animal Health posted an ROIC of 1.29%.

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 Elanco Animal Health, the positive return on invested capital ratio of 1.29% 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

Elanco Animal Health reported Q2 earnings per share at $0.36/share, which beat analyst predictions of $0.25/share.

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