Hawaiian Electric Indus (NYSE:HE) reported earnings of $100.47 million in the first quarter, up 24.9 percent from the previous quarter. Sales fell to $642.95 million, a 1.42 percent reduction from the previous quarter. Hawaiian Electric Indus made $652.22 million in sales in Q4 but only made $80.43 million in profit.
What Is ROCE and How Does It Work?
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. Hawaiian Electric Indus had a ROCE of 0.04 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.
In the instance of Hawaiian Electric Indus, the favorable ROCE ratio will be a factor to consider before making long-term financial decisions.
Insights into Q1 Earnings
Hawaiian Electric Indus reported $0.59 earnings per share in the first quarter, beating analyst expectations of $0.36./n
