How Good Are Murphy Oil's Earnings? | Return On Invested Capital

According to Benzinga Pro, during Q3, Murphy Oil MUR earned $282.54 million, a 19.7% increase from the preceding quarter. Murphy Oil also posted a total of $630.70 million in sales, a 14.75% increase since Q2. In Q2, Murphy Oil earned $236.03 million, and total sales reached $549.64 million.

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 Q3, Murphy Oil posted an ROIC of 3.47%.

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 Q3, Murphy Oil posted an ROIC of 3.47%.

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 Murphy Oil, the positive return on invested capital ratio of 3.47% 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

Murphy Oil reported Q3 earnings per share at $0.24/share, which beat analyst predictions of $0.17/share.