Benzinga | Jan 7, 2022 01:06PM EST

Conagra Brands's Return on Invested Capital Insights

According to Benzinga Pro, during Q2, Conagra Brands (NYSE:CAG) earned $275.90 million, a 17.06% increase from the preceding quarter. Conagra Brands also posted a total of $3.06 billion in sales, a 15.3% increase since Q1. Conagra Brands earned $235.70 million, and sales totaled $2.65 billion in Q1.

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, Conagra Brands posted an ROIC of 2.04%.

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, Conagra Brands posted an ROIC of 2.04%.

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 Conagra Brands, the positive return on invested capital ratio of 2.04% 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

Conagra Brands reported Q2 earnings per share at $0.64/share, which did not meet analyst predictions of $0.68/share.

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