Looking Into Sturm Ruger & Co's Return On Invested Capital

Pulled from Benzinga Pro data, Sturm Ruger & Co RGR posted Q1 earnings of $30.23 million, an increase from Q4 of 20.69%. Sales dropped to $166.57 million, a 0.87% decrease between quarters. Sturm Ruger & Co earned $38.12 million, and sales totaled $168.04 million in Q4.

Why Is ROIC Significant?

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, Sturm Ruger & Co posted an ROIC of 10.25%.

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, Sturm Ruger & Co posted an ROIC of 10.25%.

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 Sturm Ruger & Co, the positive return on invested capital ratio of 10.25% 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

Sturm Ruger & Co reported Q1 earnings per share at $1.7/share, which did not meet analyst predictions of $1.72/share.

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