Pentair's Return On Invested Capital Insights

According to Benzinga Pro, during Q2, Pentair PNR earned $152.90 million, a 30.02% increase from the preceding quarter. Pentair also posted a total of $1.06 billion in sales, a 6.44% increase since Q1. In Q1, Pentair earned $117.60 million, whereas sales reached $999.60 million.

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, Pentair posted an ROIC of 4.06%.

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, Pentair posted an ROIC of 4.06%.

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 Pentair, the positive return on invested capital ratio of 4.06% 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

Pentair reported Q2 earnings per share at $1.02/share, which beat analyst predictions of $1.0/share.

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