Examining Subsea 7 SA.’s (OB:SUBC) past track record of performance is a useful exercise for investors. It allows us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess SUBC’s latest performance announced on 31 December 2017 and weight these figures against its longer term trend and industry movements. View our latest analysis for Subsea 7
How Well Did SUBC Perform?
I use data from the most recent 12 months, 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 technique enables me to analyze different companies on a more comparable basis, using new information. For Subsea 7, its most recent earnings (trailing twelve month) is US$454.80M, which, in comparison to last year’s level, has risen by a fairly subdued 4.31%. Given that these values may be somewhat nearsighted, I have computed an annualized five-year value for SUBC’s net income, which stands at US$294.67M This means that, generally, Subsea 7 has been able to steadily improve its profits over the last few years as well.What’s enabled this growth? Let’s take a look at if it is merely because of industry tailwinds, or if Subsea 7 has experienced some company-specific growth. Even though both top-line and bottom-line growth rates in the last few years, were, on average, negative, earnings were more so. While this has caused a margin contraction, it has softened Subsea 7’s earnings contraction. Viewing growth from a sector-level, the NO energy services industry has been ramping up growth, more than doubling average earnings over the previous twelve months, . This is a a strong change from a volatile drop of -4.61% in the previous few years. This means that, in the recent industry expansion, Subsea 7 has not been able to gain as much as its average peer.
What does this mean?
Though Subsea 7’s past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I suggest you continue to research Subsea 7 to get a better picture of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for SUBC’s future growth? Take a look at our free research report of analyst consensus for SUBC’s outlook.
- 2. Financial Health: Is SUBC’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.