Benzinga | Oct 27, 2021 12:11PM EDT

Hawkins Earnings Perspective: Return On Invested Capital

According to Benzinga Pro, during Q1, Hawkins (NASDAQ:HWKN) earned $22.12 million, a 71.79% increase from the preceding quarter. Hawkins also posted a total of $181.24 million in sales, a 11.21% increase since Q4. In Q4, Hawkins earned $12.88 million, and total sales reached $162.97 million.

What Is ROIC?

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 Q1, Hawkins posted an ROIC of 5.96%.

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 Q1, Hawkins posted an ROIC of 5.96%.

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 Hawkins, the positive return on invested capital ratio of 5.96% 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

Hawkins reported Q1 earnings per share at $0.79/share, which beat analyst predictions of $0.7/share.