Frank’s International NV.’s (NYSE:FI) Earnings Declined -88.77%, But How Did It Fare Against The Industry?
For investors with a long-term horizon, assessing earnings trend over time and against industry benchmarks is more valuable than looking at a single earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Frank’s International NV. (NYSE:FI) useful as an attempt to give more color around how Frank’s International is currently performing. Check out our latest analysis for Frank’s International
Was FI weak performance lately part of a long-term decline?
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 technique allows me to examine different stocks on a more comparable basis, using the latest information. For Frank’s International, its most recent earnings (trailing twelve month) is -US$116.50M, which, relative to the prior year’s figure, has become more negative. Since these values are fairly nearsighted, I have calculated an annualized five-year figure for FI’s net income, which stands at US$89.22M.
We can further evaluate Frank’s International’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Frank’s International has seen an annual decline in revenue of -12.01%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Looking at growth from a sector-level, the US energy services industry has been growing its average earnings by double-digit 42.96% in the past twelve months, . This is a change from a volatile drop of -17.10% in the previous couple of years. This means that any tailwind the industry is deriving benefit from, Frank’s International has not been able to gain as much as its industry peers.
What does this mean?
Though Frank’s International’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always hard to envisage what will happen in the future and when. The most insightful step is to examine company-specific issues Frank’s International may be facing and whether management guidance has dependably been met in the past. I suggest you continue to research Frank’s International to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for FI’s future growth? Take a look at our free research report of analyst consensus for FI’s outlook.
2. Financial Health: Is FI’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 2017. 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.
