SPX's Return On Capital Employed Overview - SPX Technologies (NYSE:SPXC)
According to Benzinga Pro data SPX SPXC posted a 76.15% decrease in earnings from Q2. Sales, however, increased by 4.66% over the previous quarter to $370.50 million. Despite the increase in sales this quarter, the decrease in earnings may suggest SPX is not utilizing their capital as effectively as possible. SPX reached earnings of $13.00 million and sales of $354.00 million in Q2.
Why Is ROCE Significant?
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 Q3, SPX posted an ROCE of 0.0%.
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.
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