Analog Devices's Return on Invested Capital Overview

According to Benzinga Pro, during Q2, Analog Devices ADI earned $783.27 million, a 179.66% increase from the preceding quarter. Analog Devices also posted a total of $2.97 billion in sales, a 10.73% increase since Q1. Analog Devices earned $280.08 million, and sales totaled $2.68 billion in Q1.

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, Analog Devices posted an ROIC of 0.97%.

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, Analog Devices posted an ROIC of 0.97%.

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 Analog Devices, the positive return on invested capital ratio of 0.97% 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

Analog Devices reported Q2 earnings per share at $2.4/share, which beat analyst predictions of $2.11/share.

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