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Looking Into Owens & Minor's Return On Capital Employed

By Benzinga Insights

According to Benzinga Pro, during Q1, Owens & Minor (NYSE:OMI) earned $39.28 million, a 6.42% increase from the preceding quarter. Owens & Minor's sales decreased to $2.41 billion, a 2.43% change since Q4. Owens & Minor earned $41.98 million, and sales totaled $2.47 billion in Q4.

What Is Return On Capital Employed?

Earnings data without context is not clear and can be difficult to base trading decisions on. Return on Capital Employed (ROCE) helps to filter signal from noise by measuring yearly pre-tax profit relative to capital employed by a business. Generally, a higher ROCE suggests successful growth of a company and is a sign of higher earnings per share in the future. In Q1, Owens & Minor posted an ROCE of 0.04%.

It is important to keep in mind that ROCE 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.

ROCE is a powerful metric for comparing the effectiveness of capital allocation for similar companies. A relatively high ROCE shows Owens & Minor 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 Owens & Minor, the positive return on capital employed ratio of 0.04% 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.

Analyst Predictions

Owens & Minor reported Q1 earnings per share at $0.96/share, which beat analyst predictions of $0.82/share.

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

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Dive Deeper:
Looking Into Infinera's Return On Capital Employed
Infinera (NASDAQ:INFN) brought in sales totaling $338.87 million during Q1 according to data provided by Benzinga Pro. However, earnings decreased…
Looking Into Harsco's Return On Capital Employed
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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…
Looking Into Public Storage's Return On Capital Employed
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One subscription that gives you access to news from hundreds of sites
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