Pulled from Benzinga Pro data, Clorox (NYSE:CLX) posted Q2 earnings of $72.00 million, an increase from Q1 of 49.65%. Sales dropped to $1.69 billion, a 6.37% decrease between quarters. In Q1, Clorox earned $143.00 million, and total sales reached $1.81 billion.
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 Q2, Clorox posted an ROIC of 6.76%.
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 Q2, Clorox posted an ROIC of 6.76%.
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 Clorox, the positive return on invested capital ratio of 6.76% 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
Clorox reported Q2 earnings per share at $0.66/share, which did not meet analyst predictions of $0.84/share.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
