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How Does Cargotec Corporation's (HEL:CGCBV) Earnings Growth Stack Up Against Industry Performance?

Simply Wall St

Examining Cargotec Corporation's (HLSE:CGCBV) 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 CGCBV's latest performance announced on 30 June 2019 and compare these figures to its longer term trend and industry movements.

Check out our latest analysis for Cargotec

How Well Did CGCBV Perform?

CGCBV's trailing twelve-month earnings (from 30 June 2019) of €131m has jumped 38% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 6.4%, indicating the rate at which CGCBV is growing has accelerated. What's enabled this growth? Well, let’s take a look at if it is solely because of an industry uplift, or if Cargotec has seen some company-specific growth.

HLSE:CGCBV Income Statement, October 12th 2019

In terms of returns from investment, Cargotec has fallen short of achieving a 20% return on equity (ROE), recording 9.4% instead. Furthermore, its return on assets (ROA) of 4.0% is below the FI Machinery industry of 6.2%, indicating Cargotec's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Cargotec’s debt level, has increased over the past 3 years from 11% to 11%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 86% to 75% over the past 5 years.

What does this mean?

Though Cargotec's past data is helpful, it is only one aspect of my investment thesis. While Cargotec has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. You should continue to research Cargotec to get a better picture of the stock by looking at:

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

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.

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. Thank you for reading.