Yahoo Finance Does HeidelbergCement AG's (ETR:HEI) -2.9% Earnings Drop Reflect A Longer Term Trend?
Measuring HeidelbergCement AG's (XTRA:HEI) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess HEI's recent performance announced on 31 December 2019 and compare these figures to its historical trend and industry movements.
Check out our latest analysis for HeidelbergCement
Commentary On HEI's Past Performance
HEI's trailing twelve-month earnings (from 31 December 2019) of €1.1b has declined by -2.9% 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 9.6%, indicating the rate at which HEI is growing has slowed down. What could be happening here? Well, let’s take a look at what’s going on with margins and whether the rest of the industry is facing the same headwind.
In terms of returns from investment, HeidelbergCement has fallen short of achieving a 20% return on equity (ROE), recording 6.9% instead. Furthermore, its return on assets (ROA) of 3.7% is below the DE Basic Materials industry of 6.3%, indicating HeidelbergCement's are utilized less efficiently. However, its return on capital (ROC), which also accounts for HeidelbergCement’s debt level, has increased over the past 3 years from 5.4% to 5.7%.
What does this mean?
HeidelbergCement's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that are profitable, but have volatile earnings, can have many factors impacting its business. You should continue to research HeidelbergCement to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for HEI’s future growth? Take a look at our free research report of analyst consensus for HEI’s outlook.
Financial Health: Are HEI’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 December 2019. This may not be consistent with full year annual report figures.
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.
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