Looking Into Newell Brands's Return On Invested Capital

Pulled from Benzinga Pro data, Newell Brands NWL posted Q1 earnings of $234.00 million, an increase from Q4 of 143.75%. Sales dropped to $2.39 billion, a 14.87% decrease between quarters. In Q4, Newell Brands brought in $2.81 billion in sales but only earned $96.00 million.

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 Q1, Newell Brands posted an ROIC of 2.5%.

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 Q1, Newell Brands posted an ROIC of 2.5%.

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 Newell Brands, the positive return on invested capital ratio of 2.5% 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

Newell Brands reported Q1 earnings per share at $0.36/share, which beat analyst predictions of $0.27/share.

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