According to data from Benzinga Pro, during Q2, Kala Pharmaceuticals's (NASDAQ:KALA) reported sales totaled $2.10 million. Despite a 14.66% increase in earnings, the company posted a loss of $28.11 million. In Q1, Kala Pharmaceuticals brought in $1.37 million in sales but lost $32.94 million in earnings.

What Is ROCE?

Return on Capital Employed is a measure of yearly pre-tax profit relative to capital employed by a business. Changes in earnings and sales indicate shifts in a company's ROCE. A higher ROCE 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 ROCE suggests the opposite. In Q2, Kala Pharmaceuticals posted an ROCE of 0.89%.

Keep in mind, while ROCE 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 Kala Pharmaceuticals, the positive return on capital employed ratio of 0.89% 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

Kala Pharmaceuticals reported Q2 earnings per share at $-0.35/share, which beat analyst predictions of $-0.43/share.

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