Cerner's Return on Invested Capital Overview

Pulled from Benzinga Pro data, Cerner CERN posted Q1 earnings of $206.13 million, an increase from Q4 of 17.89%. Sales dropped to $1.43 billion, a 1.52% decrease between quarters. In Q4, Cerner brought in $1.45 billion in sales but only earned $174.84 million.

What Is ROIC?

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, Cerner posted an ROIC of 4.57%.

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, Cerner posted an ROIC of 4.57%.

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 Cerner, the positive return on invested capital ratio of 4.57% 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

Cerner reported Q1 earnings per share at $0.89/share, which beat analyst predictions of $0.87/share.

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