Yahoo Finance Does Koninklijke Philips NV’s (AMS:PHIA) 23% Earnings Growth Reflect The Long-Term Trend?
Assessing Koninklijke Philips NV’s (AMS:PHIA) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess PHIA’s latest performance announced on 30 September 2018 and evaluate these figures to its historical trend and industry movements.
View our latest analysis for Koninklijke Philips
Did PHIA beat its long-term earnings growth trend and its industry?
PHIA’s trailing twelve-month earnings (from 30 September 2018) of €1.0b has jumped 23% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 12%, indicating the rate at which PHIA is growing has accelerated. How has it been able to do this? Let’s see whether it is only attributable to industry tailwinds, or if Koninklijke Philips has seen some company-specific growth.
In terms of returns from investment, Koninklijke Philips has fallen short of achieving a 20% return on equity (ROE), recording 9.1% instead. Furthermore, its return on assets (ROA) of 4.5% is below the NL Medical Equipment industry of 8.8%, indicating Koninklijke Philips’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Koninklijke Philips’s debt level, has increased over the past 3 years from 8.7% to 11%.
What does this mean?
Koninklijke Philips’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While Koninklijke Philips has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I recommend you continue to research Koninklijke Philips to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for PHIA’s future growth? Take a look at our free research report of analyst consensus for PHIA’s outlook.
Financial Health: Are PHIA’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.
