Pulled from Benzinga Pro data, Baxter International (NYSE:BAX) showed a loss in earnings since Q4, totaling $73.00 million. Sales, on the other hand, increased by 5.49% to $3.71 billion during Q1. In Q4, Baxter International earned $242.00 million and total sales reached $3.51 billion.
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, Baxter International posted an ROIC of 0.56%.
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, Baxter International posted an ROIC of 0.56%.
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 Baxter International, the positive return on invested capital ratio of 0.56% 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
Baxter International reported Q1 earnings per share at $0.93/share, which beat analyst predictions of $0.8/share.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
