Return on Capital Employed Overview: Greenbrier Companies

After pulling data from Benzinga Pro it seems like during Q3, Greenbrier Companies GBX earned $25.89 million, a 173.31% increase from the preceding quarter. Greenbrier Companies also posted a total of $450.14 million in sales, a 52.27% increase since Q2. In Q2, Greenbrier Companies brought in $295.62 million in sales but lost $35.32 million in earnings.

What Is Return On Capital Employed?

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 Q3, Greenbrier Companies posted an ROCE of 0.02%.

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.

Return on Capital Employed is an important measurement of efficiency and a useful tool when comparing companies that operate in the same industry. A relatively high ROCE indicates a company may be generating profits that can be reinvested into more capital, leading to higher returns and growing EPS for shareholders.

In Greenbrier Companies's case, the positive ROCE ratio will be something investors pay attention to before making long-term financial decisions.

Upcoming Earnings Estimate

Greenbrier Companies reported Q3 earnings per share at $0.69/share, which beat analyst predictions of $0.13/share.