Australian Pacific Coal Limited’s (ASX:AQC) Earnings Declined 0.2%, But How Did It Fare Against The Industry?
Examining how Australian Pacific Coal Limited (ASX:AQC) is performing as a company requires looking at more than just a years’ earnings. Below, I will run you through a simple sense check to build perspective on how Australian Pacific Coal is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its metals and mining industry peers. See our latest analysis for AQC
How Did AQC’s Recent Performance Stack Up Against Its Past?
To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This allows me to examine various companies in a uniform manner using the latest information. For Australian Pacific Coal, the latest earnings -A$8.9M, which, relative to the prior year’s level, has become more negative. Since these values are fairly short-term thinking, I’ve estimated an annualized five-year figure for Australian Pacific Coal’s earnings, which stands at -A$2.9M. This doesn’t seem to paint a better picture, as earnings seem to have consistently been getting more and more negative over time.
We can further examine Australian Pacific Coal’s loss by researching what has been happening in the industry as well as within the company. Initially, I want to quickly look into the line items. Revenue growth over last few years has been negative at -30.84%. The key to profitability here is to make sure the company’s cost growth is well-managed. Inspecting growth from a sector-level, the Australian metals and mining industry has been growing, albeit, at a unexciting single-digit rate of 6.76% over the prior twelve months, and a substantial 11.62% over the previous few years. This means whatever uplift the industry is enjoying, Australian Pacific Coal has not been able to realize the gains unlike its average peer.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always difficult to predict what will happen in the future and when. The most useful step is to assess company-specific issues Australian Pacific Coal may be facing and whether management guidance has consistently been met in the past. I recommend you continue to research Australian Pacific Coal to get a more holistic view of the stock by looking at:
1. Financial Health: Is AQC’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.
2. 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.
