Cheniere Energy Earnings Perspective: Return On Invested Capital

Pulled from Benzinga Pro data, Cheniere Energy LNG posted Q2 earnings of $145.00 million, an increase from Q1 of 86.37%. Sales dropped to $3.02 billion, a 2.36% decrease between quarters. Cheniere Energy earned $1.06 billion, and sales totaled $3.09 billion in Q1.

What Is ROIC?

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, Cheniere Energy posted an ROIC of 0.48%.

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, Cheniere Energy posted an ROIC of 0.48%.

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 Cheniere Energy, the positive return on invested capital ratio of 0.48% 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

Cheniere Energy reported Q2 earnings per share at $-1.3/share, which did not meet analyst predictions of $0.87/share.