Was Rogers Corporation’s (NYSE:ROG) Earnings Decline Part Of A Broader Industry Downturn?
After looking at Rogers Corporation’s (NYSE:ROG) latest earnings update (30 September 2018), I found it helpful to revisit the company’s performance in the past couple of years and compare this against the latest numbers. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is an important aspect. In this article I briefly touch on my key findings.
Check out our latest analysis for Rogers
How Well Did ROG Perform?
ROG’s trailing twelve-month earnings (from 30 September 2018) of US$70m has declined by -18% 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 14%, indicating the rate at which ROG is growing has slowed down. What could be happening here? Well, let’s look at what’s going on with margins and whether the whole industry is experiencing the hit as well.
In terms of returns from investment, Rogers has fallen short of achieving a 20% return on equity (ROE), recording 8.5% instead. However, its return on assets (ROA) of 5.9% exceeds the US Electronic industry of 5.3%, indicating Rogers has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Rogers’s debt level, has declined over the past 3 years from 11% to 9.7%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 17% to 29% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have unpredictable earnings, can have many factors impacting its business. I suggest you continue to research Rogers to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for ROG’s future growth? Take a look at our free research report of analyst consensus for ROG’s outlook.
Financial Health: Are ROG’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 30 September 2018. This may not be consistent with full year annual report figures.
To help readers see past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
