Cleveland-Cliffs's Return on Invested Capital Insights

Pulled from Benzinga Pro data, Cleveland-Cliffs CLF posted Q4 earnings of $899.00 million, an increase from Q3 of 29.88%. Sales dropped to $5.35 billion, a 10.96% decrease between quarters. In Q3, Cleveland-Cliffs earned $1.28 billion, and total sales reached $6.00 billion.

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 Q4, Cleveland-Cliffs posted an ROIC of 17.69%.

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 Q4, Cleveland-Cliffs posted an ROIC of 17.69%.

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 Cleveland-Cliffs, the positive return on invested capital ratio of 17.69% 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

Cleveland-Cliffs reported Q4 earnings per share at $1.78/share, which did not meet analyst predictions of $2.12/share.

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