According to Benzinga Pro, during Q2, Installed Building Prods (NYSE:IBP) earned $59.90 million, a 77.12% increase from the preceding quarter. Installed Building Prods also posted a total of $676.75 million in sales, a 15.19% increase since Q1. In Q1, Installed Building Prods earned $33.82 million, and total sales reached $587.49 million.

What Is ROCE?

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, Installed Building Prods posted an ROCE of 0.15%.

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.

For Installed Building Prods, the positive return on capital employed ratio of 0.15% 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

Installed Building Prods reported Q2 earnings per share at $2.48/share, which beat analyst predictions of $1.94/share.

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