AutoNation's Return On Invested Capital Insights

According to Benzinga Pro, during Q2, AutoNation AN earned $376.30 million, a 3.92% increase from the preceding quarter. AutoNation also posted a total of $6.87 billion in sales, a 1.72% increase since Q1. In Q1, AutoNation earned $362.10 million, and total sales reached $6.75 billion.

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 Q2, AutoNation posted an ROIC of 7.12%.

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, AutoNation posted an ROIC of 7.12%.

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 AutoNation, the positive return on invested capital ratio of 7.12% 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

AutoNation reported Q2 earnings per share at $6.48/share, which beat analyst predictions of $6.06/share.

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