After looking at Crystal Rock Holdings Inc’s (AMEX:CRVP) latest earnings update (31 October 2017), I found it helpful to revisit the company’s performance in the past couple of years and compare this against the latest numbers. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is an important aspect. In this article I briefly touch on my key findings. View our latest analysis for Crystal Rock Holdings

Was CRVP’s recent earnings decline indicative of a tough track record?

For the most up-to-date info, I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend allows me to assess many different companies on a more comparable basis, using new information. For Crystal Rock Holdings, its most recent trailing-twelve-month earnings is US$559.70K, which, in comparison to last year’s figure, has fallen by a substantial -53.43%. Since these values are relatively short-term thinking, I’ve created an annualized five-year figure for Crystal Rock Holdings’s net income, which stands at -US$2.14M This means though earnings declined from last year, over the past couple of years, Crystal Rock Holdings’s earnings have been increasing on average.

What’s enabled this growth? Well, let’s take a look at whether it is merely owing to industry tailwinds, or if Crystal Rock Holdings has experienced some company-specific growth. Over the past couple of years, Crystal Rock Holdings expanded bottom-line, while its top-line fell, by efficiently controlling its costs. This resulted in to a margin expansion and profitability over time. Eyeballing growth from a sector-level, the US beverage industry has been growing its average earnings by double-digit 21.17% over the past twelve months, and a more muted 3.71% over the past half a decade. This means any uplift the industry is profiting from, Crystal Rock Holdings has not been able to realize the gains unlike its average peer.

What does this mean?

Crystal Rock Holdings’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that are profitable, but have unpredictable earnings, can have many factors influencing its business. I recommend you continue to research Crystal Rock Holdings to get a better picture of the stock by looking at: