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Nielsen Holdings's Return on Invested Capital Overview

Author: Benzinga Insights | July 29, 2022 09:56am

According to Benzinga Pro data Nielsen Holdings (NYSE:NLSN) posted a 1.74% decrease in earnings from Q1. Sales, however, increased by 0.57% over the previous quarter to $882.00 million. Despite the increase in sales this quarter, the decrease in earnings may suggest Nielsen Holdings is not utilizing their capital as effectively as possible. Nielsen Holdings reached earnings of $115.00 million and sales of $877.00 million in Q1.

Why Is ROIC Significant?

Return on Invested Capital is a measure of yearly pre-tax profit relative to capital invested by a business. Changes in earnings and sales indicate shifts in a company's ROIC. A higher ROIC is generally representative of successful growth of a company and is a sign of higher earnings per share in the future. A low or negative ROIC suggests the opposite. In Q2, Nielsen Holdings posted an ROIC of 2.31%.

Keep in mind, while ROIC is a good measure of a company's recent performance, it is not a highly reliable predictor of a company's earnings or sales in the near future.

Return on Invested Capital is a measure of yearly pre-tax profit relative to capital invested by a business. Changes in earnings and sales indicate shifts in a company's ROIC. A higher ROIC is generally representative of successful growth of a company and is a sign of higher earnings per share in the future. A low or negative ROIC suggests the opposite. In Q2, Nielsen Holdings posted an ROIC of 2.31%.

Keep in mind, while ROIC is a good measure of a company's recent performance, it is not a highly reliable predictor of a company's earnings or sales in the near future.

For Nielsen Holdings, the positive return on invested capital ratio of 2.31% suggests that management is allocating their capital effectively. Effective capital allocation is a positive indicator that a company will achieve more durable success and favorable long-term returns.

Upcoming Earnings Estimate

Nielsen Holdings reported Q2 earnings per share at $0.46/share, which beat analyst predictions of $0.43/share.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

Posted In: NLSN

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