Benzinga | Aug 10, 2021 10:52AM EDT

Return on Capital Employed Overview: Pioneer Natural Resources

After pulling data from Benzinga Pro it seems like during Q2, Pioneer Natural Resources (NYSE:PXD) earned $1.44 billion, a 63.04% increase from the preceding quarter. Pioneer Natural Resources also posted a total of $2.68 billion in sales, a 47.04% increase since Q1. Pioneer Natural Resources earned $882.00 million, and sales totaled $1.82 billion in Q1.

What Is Return On Capital Employed?

Changes in earnings and sales indicate shifts in Pioneer Natural Resources's Return on Capital Employed, a measure of yearly pre-tax profit relative to capital employed by a business. Generally, a higher ROCE suggests successful growth of a company and is a sign of higher earnings per share in the future. In Q2, Pioneer Natural Resources posted an ROCE of 0.06%.

It is important to keep in mind ROCE evaluates past performance and is not used as a predictive tool. It is a good measure of a company's recent performance, but several factors could affect earnings and sales in the near future.

Return on Capital Employed is an important measurement of efficiency and a useful tool when comparing companies that operate in the same industry. A relatively high ROCE indicates a company may be generating profits that can be reinvested into more capital, leading to higher returns and growing EPS for shareholders.

For Pioneer Natural Resources, the return on capital employed ratio shows the number of assets can actually help the company achieve higher returns, an important note investors will take into account when gauging the payoff from long-term financing strategies.

Upcoming Earnings Estimate

Pioneer Natural Resources reported Q2 earnings per share at $2.55/share, which did not meet analyst predictions of $2.61/share.