Acuity Brands Earnings Perspective: Return On Invested Capital

Pulled from Benzinga Pro data, Acuity Brands AYI posted Q2 earnings of $75.30 million, an increase from Q1 of 14.04%. Sales dropped to $909.10 million, a 1.84% decrease between quarters. In Q1, Acuity Brands earned $87.60 million, and total sales reached $926.10 million.

Why Is ROIC Significant?

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, Acuity Brands posted an ROIC of 4.48%.

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, Acuity Brands posted an ROIC of 4.48%.

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 Acuity Brands, the positive return on invested capital ratio of 4.48% 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

Acuity Brands reported Q2 earnings per share at $2.57/share, which beat analyst predictions of $2.37/share.

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