Return on Capital Employed Insights for Williams Companies

After pulling data from Benzinga Pro it seems like during Q2, Williams Companies WMB earned $612.00 million, a 17.19% increase from the preceding quarter. Williams Companies's sales decreased to $2.28 billion, a 12.6% change since Q1. Williams Companies earned $739.00 million, and sales totaled $2.61 billion in Q1.

What Is Return On Capital Employed?

Return on Capital Employed is a measure of yearly pre-tax profit relative to capital employed by a business. Changes in earnings and sales indicate shifts in a company's ROCE. A higher ROCE 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 ROCE suggests the opposite. In Q2, Williams Companies posted an ROCE of 0.04%.

Keep in mind, while ROCE 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 Capital Employed is an important measurement of efficiency and a useful tool when comparing companies that operate in the same industry. A relatively high ROCE indicates a company may be generating profits that can be reinvested into more capital, leading to higher returns and growing EPS for shareholders.

In Williams Companies's case, the positive ROCE ratio will be something investors pay attention to before making long-term financial decisions.

Upcoming Earnings Estimate

Williams Companies reported Q2 earnings per share at $0.27/share, which did not meet analyst predictions of $0.28/share.