Looking Into AMETEK's Return On Invested Capital

Pulled from Benzinga Pro data, AMETEK AME posted Q1 earnings of $272.45 million, an increase from Q4 of 3.28%. Sales dropped to $1.46 billion, a 2.99% decrease between quarters. AMETEK earned $281.68 million, and sales totaled $1.50 billion in Q4.

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 Q1, AMETEK posted an ROIC of 3.73%.

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 Q1, AMETEK posted an ROIC of 3.73%.

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 AMETEK, the positive return on invested capital ratio of 3.73% 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.

Upcoming Earnings Estimate

AMETEK reported Q1 earnings per share at $1.33/share, which beat analyst predictions of $1.27/share.

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