Looking Into Frontier Communications's Return On Invested Capital

Pulled from Benzinga Pro data, Frontier Communications FYBR posted Q1 earnings of $65.00 million, an increase from Q4 of 65.61%. Sales dropped to $1.45 billion, a 6.22% decrease between quarters. Frontier Communications earned $189.00 million, and sales totaled $1.54 billion 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, Frontier Communications posted an ROIC of 1.38%.

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, Frontier Communications posted an ROIC of 1.38%.

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 Frontier Communications, the positive return on invested capital ratio of 1.38% 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

Frontier Communications reported Q1 earnings per share at $0.26/share, which beat analyst predictions of $0.24/share.

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