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Should You Be Concerned With Jenoptik AG's (ETR:JEN) -5.4% Earnings Drop?

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Measuring Jenoptik AG's (XTRA:JEN) track record of past performance is a valuable exercise for investors. It allows us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess JEN's recent performance announced on 30 September 2019 and compare these figures to its historical trend and industry movements.

See our latest analysis for Jenoptik

Commentary On JEN's Past Performance

JEN's trailing twelve-month earnings (from 30 September 2019) of €78m has declined by -5.4% 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 JEN is growing has slowed down. Why could this be happening? Well, let's look at what's transpiring with margins and if the rest of the industry is experiencing the hit as well.

XTRA:JEN Income Statement, December 23rd 2019
XTRA:JEN Income Statement, December 23rd 2019

In terms of returns from investment, Jenoptik has fallen short of achieving a 20% return on equity (ROE), recording 12% instead. However, its return on assets (ROA) of 7.8% exceeds the DE Electronic industry of 6.1%, indicating Jenoptik has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Jenoptik’s debt level, has increased over the past 3 years from 9.5% to 11%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 31% to 16% over the past 5 years.

What does this mean?

Though Jenoptik's past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have capricious earnings, can have many factors impacting its business. I suggest you continue to research Jenoptik to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for JEN’s future growth? Take a look at our free research report of analyst consensus for JEN’s outlook.

  2. Financial Health: Are JEN’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.