BBA Aviation plc (LON:BBA): Has Recent Earnings Growth Beaten Long-Term Trend?
After looking at BBA Aviation plc's (LSE:BBA) latest earnings announcement (30 June 2019), I found it useful to revisit the company's performance in the past couple of years and assess this against the most recent figures. 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 a crucial aspect. Below is a brief commentary on my key takeaways.
See our latest analysis for BBA Aviation
Were BBA's earnings stronger than its past performances and the industry?
BBA's trailing twelve-month earnings (from 30 June 2019) of US$104m has increased by 4.2% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -1.7%, indicating the rate at which BBA is growing has accelerated. What's enabled this growth? Let's see whether it is solely owing to industry tailwinds, or if BBA Aviation has seen some company-specific growth.
In terms of returns from investment, BBA Aviation has fallen short of achieving a 20% return on equity (ROE), recording 5.6% instead. However, its return on assets (ROA) of 4.0% exceeds the GB Infrastructure industry of 3.7%, indicating BBA Aviation has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for BBA Aviation’s debt level, has increased over the past 3 years from 4.3% to 5.5%.
What does this mean?
BBA Aviation's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While BBA Aviation has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. You should continue to research BBA Aviation to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for BBA’s future growth? Take a look at our free research report of analyst consensus for BBA’s outlook.
Financial Health: Are BBA’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 June 2019. This may not be consistent with full year annual report figures.
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