Measuring OCI NV.’s (ENXTAM:OCI) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess OCI’s recent performance announced on 30 June 2017 and compare these figures to its historical trend and industry movements. Check out our latest analysis for OCI
How OCI fared against its long-term earnings performance and its industry
I prefer to use the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This blend enables me to examine many different companies in a uniform manner using new information. For OCI, its most recent bottom-line (trailing twelve month) is -US$85.60M, which, in comparison to last year’s level, has become less negative. Given that these figures may be somewhat nearsighted, I have computed an annualized five-year figure for OCI’s earnings, which stands at -US$267.35M. This suggests that, even though net income is negative, it has become less negative over the years.We can further analyze OCI’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade OCI has seen an annual decline in revenue of -24.17%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Inspecting growth from a sector-level, the NL chemicals industry has been growing its average earnings by double-digit 11.93% over the past twelve months, and 16.60% over the past five years. This means that, although OCI is currently loss-making, it may have gained from industry tailwinds, moving earnings into a more favorable position.
What does this mean?
OCI’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always hard to envisage what will occur going forward, and when. The most useful step is to examine company-specific issues OCI may be facing and whether management guidance has steadily been met in the past. You should continue to research OCI to get a better picture of the stock by looking at the areas below. Just a heads up – to access some parts of the Simply Wall St research tool you might be asked to create a free account, but it takes just one click and the information they provide is definitely worth it in my opinion.
- 1. Future Outlook: What are well-informed industry analysts predicting for OCI’s future growth? Take a look at this free research report of analyst consensus for OCI’s outlook.
- 2. Financial Health: Is OCI’s operations financially sustainable? Balance sheets can be hard to analyze, which is why Simply Wall St does it for you. Check out important financial health checks here.
- 3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore a free list of these great stocks here.