TimkenSteel Earnings Perspective: Return On Invested Capital

According to Benzinga Pro data TimkenSteel TMST posted a 35.03% decrease in earnings from Q4. Sales, however, increased by 4.05% over the previous quarter to $352.00 million. Despite the increase in sales this quarter, the decrease in earnings may suggest TimkenSteel is not utilizing their capital as effectively as possible. TimkenSteel reached earnings of $57.10 million and sales of $338.30 million in Q4.

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, TimkenSteel posted an ROIC of 5.62%.

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, TimkenSteel posted an ROIC of 5.62%.

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 TimkenSteel, the positive return on invested capital ratio of 5.62% 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

TimkenSteel reported Q1 earnings per share at $0.92/share, which beat analyst predictions of $0.81/share.

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