Pulled from Benzinga Pro data, Apple (NASDAQ:AAPL) posted Q2 earnings of $25.01 billion, an increase from Q1 of 27.78%. Sales dropped to $97.28 billion, a 21.52% decrease between quarters. Apple reached earnings of $34.63 billion and sales of $123.94 billion in Q1.
Why Is ROIC Significant?
Return on Invested Capital is a measure of yearly pre-tax profit relative to capital invested by a business. Changes in earnings and sales indicate shifts in a company's ROIC. A higher ROIC is generally representative of successful growth of a company and is a sign of higher earnings per share in the future. A low or negative ROIC suggests the opposite. In Q2, Apple posted an ROIC of 21.31%.
Keep in mind, while ROIC is a good measure of a company's recent performance, it is not a highly reliable predictor of a company's earnings or sales in the near future.
Return on Invested Capital is a measure of yearly pre-tax profit relative to capital invested by a business. Changes in earnings and sales indicate shifts in a company's ROIC. A higher ROIC is generally representative of successful growth of a company and is a sign of higher earnings per share in the future. A low or negative ROIC suggests the opposite. In Q2, Apple posted an ROIC of 21.31%.
Keep in mind, while ROIC is a good measure of a company's recent performance, it is not a highly reliable predictor of a company's earnings or sales in the near future.
For Apple, the positive return on invested capital ratio of 21.31% suggests that management is allocating their capital effectively. Effective capital allocation is a positive indicator that a company will achieve more durable success and favorable long-term returns.
Upcoming Earnings Estimate
Apple reported Q2 earnings per share at $1.52/share, which beat analyst predictions of $1.43/share.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
