Greif (NYSE:GEF) earned $107.10 million in the second quarter, up 64.77 percent from the previous quarter. Greif also reported $1.34 billion in sales, up 16.91 percent from the previous quarter. Greif made $65.00 million in the first quarter, with $1.15 billion in sales.
Why Is ROCE Important?
Changes in earnings and sales show changes in Greif’s Return on Capital Employed, a measure of a company’s annual pre-tax profit as a percentage of its total capital employed. In general, a greater ROCE indicates that a company is growing successfully and that future earnings per share will be higher. Greif had a 0.07 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. Greif’s relatively high ROCE indicates that it is possibly 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.
Greif’s return on capital employed ratio demonstrates that having more assets might actually help the company earn better returns, which is something investors will consider when calculating the payout from long-term financing options.
Greif reported $1.13 earnings per share in the second quarter, beating analyst expectations of $1.06 per share./n
