Benzinga | Jan 28, 2022 09:52AM EST

Eagle Materials Earnings Perspective: Return On Invested Capital

According to Benzinga Pro, during Q3, Eagle Materials (NYSE:EXP) earned $102.48 million, a 0.35% increase from the preceding quarter. Eagle Materials's sales decreased to $462.94 million, a 9.17% change since Q2. In Q2, Eagle Materials earned $102.12 million, whereas sales reached $509.69 million.

What Is ROIC?

Earnings data without context is not clear and can difficult to base trading decisions on. Return on Invested Capital (ROIC) helps to filter signal from noise by measuring yearly pre-tax profit relative to invested capital by a business. Generally, a higher ROIC suggests successful growth of a company and is a sign of higher earnings per share in the future. In Q3, Eagle Materials posted an ROIC of 6.82%.

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

Earnings data without context is not clear and can difficult to base trading decisions on. Return on Invested Capital (ROIC) helps to filter signal from noise by measuring yearly pre-tax profit relative to invested capital by a business. Generally, a higher ROIC suggests successful growth of a company and is a sign of higher earnings per share in the future. In Q3, Eagle Materials posted an ROIC of 6.82%.

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

For Eagle Materials, the positive return on invested capital ratio of 6.82% 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.

Analyst Predictions

Eagle Materials reported Q3 earnings per share at $2.53/share, which beat analyst predictions of $2.46/share.

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