Lindsay (NYSE:LNN) earned $21.34 million in the third quarter, up 34.99 percent from the previous quarter. Lindsay’s sales totaled $161.94 million, up 12.79 percent from the previous quarter. Lindsay made $15.81 million in the second quarter, with sales of $143.58 million.
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. Lindsay had a 0.06 percent ROCE in the third 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 favorable ROCE ratio in Lindsay’s situation will be something investors look at before making long-term financial decisions.
Recap of Third-Quarter Earnings
Lindsay posted $1.61 profits per share in the third quarter, beating analyst expectations of $1.3/share./n
