UK Markets closed

Does Umicore SA's (EBR:UMI) 48% Earnings Growth Reflect The Long-Term Trend?

Simply Wall St

Assessing Umicore SA's (EBR:UMI) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess UMI's recent performance announced on 31 December 2018 and evaluate these figures to its longer term trend and industry movements.

Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

View our latest analysis for Umicore

How Well Did UMI Perform?

UMI's trailing twelve-month earnings (from 31 December 2018) of €317m has jumped 48% 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 UMI is growing has accelerated. What's enabled this growth? Let's take a look at if it is merely owing to an industry uplift, or if Umicore has experienced some company-specific growth.

ENXTBR:UMI Income Statement, May 23rd 2019

In terms of returns from investment, Umicore has fallen short of achieving a 20% return on equity (ROE), recording 12% instead. However, its return on assets (ROA) of 5.7% exceeds the BE Chemicals industry of 5.4%, indicating Umicore has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Umicore’s debt level, has increased over the past 3 years from 11% to 13%.

What does this mean?

Umicore's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that have performed well in the past, such as Umicore gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Umicore to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for UMI’s future growth? Take a look at our free research report of analyst consensus for UMI’s outlook.
  2. Financial Health: Are UMI’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.
  3. 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 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 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.