Has Layne Christensen Company (NASDAQ:LAYN) Improved Earnings Growth In Recent Times?
Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at Layne Christensen Company’s (NASDAQ:LAYN) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. See our latest analysis for Layne Christensen
Were LAYN’s earnings stronger than its past performances and the industry?
For the purpose of this commentary, I like to 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 analyze various companies on a similar basis, using new information. For Layne Christensen, its latest earnings (trailing twelve month) is -US$4.86M, which, in comparison to the previous year’s level, has become less negative. Given that these values are somewhat myopic, I have created an annualized five-year figure for Layne Christensen’s net income, which stands at -US$50.56M. This suggests that, while net income is negative, it has become less negative over the years.
We can further assess Layne Christensen’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Layne Christensen has seen an annual decline in revenue of -13.03%, 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 construction industry has been growing, albeit, at a muted single-digit rate of 8.88% over the previous year, and 6.26% over the past five years. This suggests that, despite the fact that Layne Christensen is presently running a loss, it may have benefited from industry tailwinds, moving earnings into a more favorable position.
What does this mean?
Layne Christensen’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always hard to predict what will happen in the future and when. The most valuable step is to examine company-specific issues Layne Christensen may be facing and whether management guidance has steadily been met in the past. I recommend you continue to research Layne Christensen to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for LAYN’s future growth? Take a look at our free research report of analyst consensus for LAYN’s outlook.
Financial Health: Is LAYN’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.
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 31 January 2018. 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.
