With 134.2% Earnings Growth Lately, Did Orion Engineered Carbons SA (OEC) Outperform The Industry?
When Orion Engineered Carbons SA’s (NYSE:OEC) announced its latest earnings (30 September 2017), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Orion Engineered Carbons S.A’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not OEC actually performed well. Below is a quick commentary on how I see OEC has performed. View our latest analysis for Orion Engineered Carbons S.A
Commentary On OEC’s Past Performance
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This blend allows me to examine various companies on a similar basis, using new information. For Orion Engineered Carbons S.A, the latest earnings is €64M, which compared to the prior year’s figure, has rocketed up by more than double. Given that these values may be fairly short-term, I’ve estimated an annualized five-year figure for OEC’s net income, which stands at €4M. This means that, on average, Orion Engineered Carbons S.A has been able to gradually grow its bottom line over the past couple of years as well.
What’s the driver of this growth? Well, let’s take a look at whether it is only because of industry tailwinds, or if Orion Engineered Carbons S.A has experienced some company-specific growth. In the last few years, Orion Engineered Carbons S.A grew bottom-line, while its top-line declined, by successfully controlling its costs. This has caused to a margin expansion and profitability over time. Inspecting growth from a sector-level, the US chemicals industry has been relatively flat in terms of earnings growth over the past few years. This shows that whatever near-term headwind the industry is experiencing, the impact on Orion Engineered Carbons S.A has been softer relative to its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Orion Engineered Carbons S.A gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Orion Engineered Carbons S.A to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for OEC’s future growth? Take a look at our free research report of analyst consensus for OEC’s outlook.
2. Financial Health: Is OEC’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
