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ROCE Insights For DCP Midstream

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DCP Midstream (NYSE:DCP) reported Q4 sales of $1.78 billion. Earnings fell to a loss of $546.00 million, resulting in a 1010.0% decrease from last quarter. In Q3, DCP Midstream earned $60.00 million and total sales reached $1.59 billion.

What Is Return On Capital Employed?

Changes in earnings and sales indicate shifts in DCP Midstream's Return on Capital Employed, a measure of yearly pre-tax profit relative to capital employed by a business. Generally, a higher ROCE suggests successful growth of a company and is a sign of higher earnings per share in the future. In Q4, DCP Midstream posted an ROCE of -0.09%.

It is important to keep in mind ROCE evaluates past performance and is not used as a predictive tool. It is a good measure of a company's recent performance, but several factors could affect earnings and sales in the near future.

View more earnings on DCP

ROCE is an important metric for the comparison of similar companies. A relatively high ROCE shows DCP Midstream is potentially operating at a higher level of efficiency than other companies in its industry. If the company is generating high profits with its current level of capital, some of that money can be reinvested in more capital which will generally lead to higher returns and earnings per share growth.

In DCP Midstream's case, the ROCE ratio shows the amount of assets may not be helping the company achieve higher returns. Investors may take this into account before making any long-term financial decisions.

Q4 Earnings Recap

DCP Midstream reported Q4 earnings per share at $0.34/share, which did not meet analyst predictions of $0.49/share.

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