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CMS Energy's Return on Invested Capital Insights

By Benzinga Insights

According to Benzinga Pro data CMS Energy (NYSE:CMS) posted a 45.58% decrease in earnings from Q4. Sales, however, increased by 16.77% over the previous quarter to $2.37 billion. Despite the increase in sales this quarter, the decrease in earnings may suggest CMS Energy is not utilizing their capital as effectively as possible. CMS Energy reached earnings of $634.00 million and sales of $2.03 billion in Q4.

What Is ROIC?

Earnings data without context is not clear and can difficult to base trading decisions on. Return on Invested Capital (ROIC) helps to filter signal from noise by measuring yearly pre-tax profit relative to invested capital by a business. Generally, a higher ROIC suggests successful growth of a company and is a sign of higher earnings per share in the future. In Q1, CMS Energy posted an ROIC of 2.37%.

It is important to keep in mind that ROIC evaluates past performance and is not used as a predictive tool. It is a good measure of a company's recent performance, but does not account for factors that could affect earnings and sales in the near future.

Earnings data without context is not clear and can difficult to base trading decisions on. Return on Invested Capital (ROIC) helps to filter signal from noise by measuring yearly pre-tax profit relative to invested capital by a business. Generally, a higher ROIC suggests successful growth of a company and is a sign of higher earnings per share in the future. In Q1, CMS Energy posted an ROIC of 2.37%.

It is important to keep in mind that ROIC evaluates past performance and is not used as a predictive tool. It is a good measure of a company's recent performance, but does not account for factors that could affect earnings and sales in the near future.

For CMS Energy, the positive return on invested capital ratio of 2.37% 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

CMS Energy reported Q1 earnings per share at $1.2/share, which beat analyst predictions of $1.12/share.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

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Dive Deeper:
Penumbra's Return on Invested Capital Insights
Pulled from Benzinga Pro data, Penumbra (NYSE:PEN) posted Q1 earnings of $79.00 thousand, an increase from Q4 of 100.32%. Sales…
Equitrans Midstream's Return on Invested Capital Insights
According to Benzinga Pro, during Q1, Equitrans Midstream (NYSE:ETRN) earned $104.91 million, a 106.67% increase from the preceding quarter. Equitrans…
American States Water's Return on Invested Capital Insights
Pulled from Benzinga Pro data, American States Water (NYSE:AWR) posted Q1 earnings of $14.16 million, an increase from Q4 of…
Cornerstone Building's Return on Invested Capital Insights
According to Benzinga Pro, during Q1, Cornerstone Building (NYSE:CNR) earned $102.28 million, a 168.8% increase from the preceding quarter. Cornerstone…
One subscription that gives you access to news from hundreds of sites
Denny's's Return on Invested Capital Insights
Pulled from Benzinga Pro data, Denny's (NASDAQ:DENN) posted Q1 earnings of $21.86 million, an increase from Q4 of 49.71%. Sales…
Eaton Earnings Perspective: Return On Invested Capital
According to Benzinga Pro data Eaton (NYSE:ETN) posted a 3.27% decrease in earnings from Q4. Sales, however, increased by 0.94%…
Get all your news in one place