Has Glanbia plc's (ISE:GL9) Earnings Momentum Changed Recently?
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After looking at Glanbia plc's (ISE:GL9) latest earnings announcement (29 December 2018), 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 Glanbia
Did GL9's recent earnings growth beat the long-term trend and the industry?
GL9's trailing twelve-month earnings (from 29 December 2018) of €234m has declined by -1.3% 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 10%, indicating the rate at which GL9 is growing has slowed down. What could be happening here? Let's examine what's going on with margins and if the rest of the industry is facing the same headwind.
In terms of returns from investment, Glanbia has fallen short of achieving a 20% return on equity (ROE), recording 15% instead. However, its return on assets (ROA) of 8.1% exceeds the IE Food industry of 5.6%, indicating Glanbia has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Glanbia’s debt level, has declined over the past 3 years from 11% to 9.3%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have volatile earnings, can have many factors influencing its business. I suggest you continue to research Glanbia to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for GL9’s future growth? Take a look at our free research report of analyst consensus for GL9’s outlook.
Financial Health: Are GL9’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 29 December 2018. 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.
