AstroNova (NASDAQ:ALOT) reported $735.00 thousand in first-quarter earnings, up 35.98 percent from the previous quarter. Between quarters, sales decreased by 1.22 percent to $29.08 million. AstroNova made $1.15 million in the fourth quarter, with total sales of $29.44 million.
Why Is ROCE Important?
Return on Capital Employed (ROCE) is a metric that compares a company’s annual pre-tax profit to the capital it has invested. Earnings and sales fluctuations imply changes in a company’s ROCE. A higher ROCE is indicative of a company’s successful growth and, as a result, of better earnings per share in the future. A low or negative ROCE indicates the inverse. AstroNova had a ROCE of 0.01 percent in the first quarter.
Keep in mind that, while ROCE is a solid indicator of a company’s previous performance, it isn’t a very good prediction of earnings or sales in the near future.
Return on Capital Employed (ROCE) is a key indicator of efficiency and a useful metric for comparing businesses in the same industry. A high ROCE shows that a company is making profits that can be reinvested into new capital, resulting in higher returns and EPS growth for shareholders.
The return on capital employed ratio for AstroNova illustrates that having more assets can actually help the company generate higher returns, which is something investors will consider when evaluating the payout from long-term financing options.
Recap of Q1 Earnings
AstroNova reported $0.08 earnings per share in the first quarter, beating analyst expectations of $0.04 per share./n
