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Looking Into BlueLinx Hldgs's Return On Capital Employed

By Benzinga Insights

According to Benzinga Pro, during Q1, BlueLinx Hldgs (NYSE:BXC) earned $133.41 million, a 81.22% increase from the preceding quarter. BlueLinx Hldgs also posted a total of $1.30 billion in sales, a 33.82% increase since Q4. In Q4, BlueLinx Hldgs earned $73.62 million, whereas sales reached $972.95 million.

What Is ROCE?

Return on Capital Employed is a measure of yearly pre-tax profit relative to capital employed by a business. Changes in earnings and sales indicate shifts in a company's ROCE. A higher ROCE 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 ROCE suggests the opposite. In Q1, BlueLinx Hldgs posted an ROCE of 0.27%.

Keep in mind, while ROCE 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.

ROCE is a powerful metric for comparing the effectiveness of capital allocation for similar companies. A relatively high ROCE shows BlueLinx Hldgs is potentially operating at a higher level of efficiency than other companies in its industry. If the company is generating high profits with its current level of capital, some of that money can be reinvested in more capital which will generally lead to higher returns and, ultimately, earnings per share (EPS) growth.

For BlueLinx Hldgs, the positive return on capital employed ratio of 0.27% 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

BlueLinx Hldgs reported Q1 earnings per share at $13.19/share, which beat analyst predictions of $8.58/share.

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

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Dive Deeper:
Looking Into TuSimple Hldgs's Return On Invested Capital
According to Benzinga Pro data, during Q1, TuSimple Hldgs (NASDAQ:TSP) posted sales of $2.26 million. Earnings were up 3.11%, but…
Looking Into Public Storage's Return On Capital Employed
Pulled from Benzinga Pro data, Public Storage (NYSE:PSA) showed a loss in earnings since Q4, totaling $516.29 million. Sales, on…
Looking Into Chesapeake Utilities's Return On Capital Employed
According to Benzinga Pro, during Q1, Chesapeake Utilities (NYSE:CPK) earned $36.93 million, a 62.61% increase from the preceding quarter. Chesapeake…
Looking Into DermTech's Return On Capital Employed
Benzinga Pro data, DermTech (NASDAQ:DMTK) reported Q1 sales of $3.72 million. Earnings fell to a loss of $30.11 million, resulting…
One subscription that gives you access to news from hundreds of sites
Looking Into CenterPoint Energy's Return On Capital Employed
According to Benzinga Pro data CenterPoint Energy (NYSE:CNP) posted a 37.97% decrease in earnings from Q4. Sales, however, increased by…
Looking Into Meritor's Return On Capital Employed
According to Benzinga Pro, during Q2, Meritor (NYSE:MTOR) earned $65.00 million, a 12.07% increase from the preceding quarter. Meritor also…
Get all your news in one place