Arctic Minerals AB (STO:ARCT): Has Recent Earnings Growth Beaten Long-Term Trend?

Examining Arctic Minerals AB's (OM:ARCT) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess ARCT's latest performance announced on 31 December 2017 and compare these figures to its longer term trend and industry movements. View our latest analysis for Arctic Minerals

Could ARCT beat the long-term trend and outperform its industry?

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 enables me to examine different companies in a uniform manner using the latest information. For Arctic Minerals, its most recent earnings (trailing twelve month) is -KR1.61M, which, against the previous year's level, has become less negative. Since these values may be fairly myopic, I’ve estimated an annualized five-year value for ARCT's net income, which stands at -KR7.21M. This suggests that, though net income is negative, it has become less negative over the years.

We can further evaluate Arctic Minerals's loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Arctic Minerals has seen an annual decline in revenue of -68.35%, on average. This adverse movement is a driver of the company's inability to reach breakeven. Has the entire industry experienced this headwind? Looking at growth from a sector-level, the SE metals and mining industry has been growing average earnings growth of 61.77% over the previous year, . This is a a solid change from a volatile drop of -10.64% in the last few years. This means any uplift the industry is deriving benefit from, Arctic Minerals has not been able to gain as much as its industry peers.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always difficult to envisage what will happen in the future and when. The most useful step is to examine company-specific issues Arctic Minerals may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research Arctic Minerals to get a more holistic view of the stock by looking at:

• 1. Financial Health: Is ARCT’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.
• 2. 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 2017. This may not be consistent with full year annual report figures.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.