Cramo Oyj (HEL:CRA1V): Does The -6.4% Earnings Drop Reflect A Longer Term Trend?
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After reading Cramo Oyj's (HEL:CRA1V) most recent earnings announcement (31 March 2019), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether Cramo Oyj's performance has been impacted by industry movements. In this article I briefly touch on my key findings.
View our latest analysis for Cramo Oyj
How Did CRA1V's Recent Performance Stack Up Against Its Past?
CRA1V's trailing twelve-month earnings (from 31 March 2019) of €81m has declined by -6.4% 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 23%, indicating the rate at which CRA1V is growing has slowed down. Why could this be happening? Let's examine what's transpiring with margins and if the entire industry is facing the same headwind.
In terms of returns from investment, Cramo Oyj has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. Furthermore, its return on assets (ROA) of 5.7% is below the FI Trade Distributors industry of 6.0%, indicating Cramo Oyj's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Cramo Oyj’s debt level, has declined over the past 3 years from 8.8% to 7.5%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 79% to 149% over the past 5 years.
What does this mean?
Though Cramo Oyj's past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have capricious earnings, can have many factors influencing its business. You should continue to research Cramo Oyj to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for CRA1V’s future growth? Take a look at our free research report of analyst consensus for CRA1V’s outlook.
Financial Health: Are CRA1V’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 March 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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. Thank you for reading.
