FuelCell Energy (NASDAQ:FCEL) reported revenues of $13.95 million in the second quarter. Despite a 20.99 percent increase in earnings, FuelCell Energy nevertheless lost $17.39 million total. FuelCell Energy had $14.88 million in sales in the first quarter, but lost $14.37 million in earnings.
What is the definition of Return On Capital Employed (ROCE)?
FuelCell Energy’s Return on Capital Invested, a measure of yearly pre-tax profit relative to capital employed, has shifted as earnings and sales have changed. In general, a greater ROCE indicates that a company is growing successfully and that future earnings per share will be higher. FuelCell Energy had a -0.05 percent ROCE in the second quarter.
It’s vital to remember that ROCE assesses historical performance and isn’t intended to be used as a forecasting tool. It’s a strong indicator of a company’s previous performance, but various factors could have an immediate impact on earnings and sales.
The Return on Capital Employed (ROCE) is an important indicator for comparing similar businesses. FuelCell Energy has a reasonably high ROCE, indicating that it may be more efficient than other companies 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.
In the instance of FuelCell Energy, the ROCE ratio indicates that the company’s assets may not be assisting it in achieving higher returns. Before making any long-term financial decisions, investors should consider this.
Insights into Q2 Earnings
FuelCell Energy reported $-0.06 earnings per share in the second quarter, missing analyst expectations of $-0.05./n
