Installed Building Prods Earnings Perspective: Return On Invested Capital

According to Benzinga Pro, during Q1, Installed Building Prods IBP earned $33.82 million, a 15.17% increase from the preceding quarter. Installed Building Prods also posted a total of $587.49 million in sales, a 10.07% increase since Q4. Installed Building Prods earned $29.37 million, and sales totaled $533.72 million in Q4.

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 Q1, Installed Building Prods posted an ROIC of 4.56%.

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, Installed Building Prods posted an ROIC of 4.56%.

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 Installed Building Prods, the positive return on invested capital ratio of 4.56% 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

Installed Building Prods reported Q1 earnings per share at $1.54/share, which beat analyst predictions of $1.12/share.

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