Global Blood Therapeutics (NASDAQ:GBT) reported revenues of $39.04 million in the first quarter. Despite a 20.83 percent increase in profits, the corporation lost $71.03 million. Global Blood Therapeutics made $41.30 million in revenue in the fourth quarter, but recorded a $58.79 million loss in profitability.
What is the definition of Return On Capital Employed (ROCE)?
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. Global Blood Therapeutics had a -0.2% ROCE 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.
The Return on Capital Employed (ROCE) is an important indicator for comparing similar businesses. Global Blood Therapeutics has a reasonably high ROCE, indicating that it may be more efficient than other firms in its industry. If the company is making a lot of money with its current capital, some of it can be reinvested in greater capital, resulting in stronger returns and higher earnings per share growth.
The return on capital employed ratio for Global Blood Therapeutics indicates that the existing level of assets may not be assisting the company in achieving higher returns, which many investors may consider when making long-term financial decisions.
Insights into Q1 Earnings
Global Blood Therapeutics reported $-1.21/share earnings per share in the first quarter, below analyst expectations of $-1.01/share./n
