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Chart Industries, Inc. (NASDAQ:GTLS): Does The -17% Earnings Drop Reflect A Longer Term Trend?

Simply Wall St

Examining Chart Industries, Inc.'s (NasdaqGS:GTLS) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess GTLS's latest performance announced on 30 September 2019 and compare these figures to its longer term trend and industry movements.

View our latest analysis for Chart Industries

How Did GTLS's Recent Performance Stack Up Against Its Past?

GTLS's trailing twelve-month earnings (from 30 September 2019) of US$52m has declined by -17% compared to the previous year.

Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 17%, indicating the rate at which GTLS is growing has slowed down. What could be happening here? Well, let's look at what's transpiring with margins and whether the entire industry is feeling the heat.

NasdaqGS:GTLS Income Statement, December 9th 2019

In terms of returns from investment, Chart Industries has fallen short of achieving a 20% return on equity (ROE), recording 4.4% instead. Furthermore, its return on assets (ROA) of 3.0% is below the US Machinery industry of 7.4%, indicating Chart Industries's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Chart Industries’s debt level, has declined over the past 3 years from 6.9% to 5.3%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 32% to 67% over the past 5 years.

What does this mean?

Chart Industries's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors affecting its business. You should continue to research Chart Industries to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for GTLS’s future growth? Take a look at our free research report of analyst consensus for GTLS’s outlook.
  2. Financial Health: Are GTLS’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 trailing twelve months from 30 September 2019. This may not be consistent with full year annual report figures.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.