Today I will examine Aeroporto Guglielmo Marconi di Bologna SpA’s (BIT:ADB) latest earnings update (31 March 2018) and compare these figures against its performance over the past couple of years, in addition to how the rest of ADB’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. Check out our latest analysis for Aeroporto Guglielmo Marconi di Bologna
Did ADB’s recent earnings growth beat the long-term trend and the industry?
ADB’s trailing twelve-month earnings (from 31 March 2018) of €16.52m has jumped 38.93% compared to the previous year. Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 26.99%, indicating the rate at which ADB is growing has accelerated. How has it been able to do this? Well, let’s take a look at if it is merely a result of industry tailwinds, or if Aeroporto Guglielmo Marconi di Bologna has seen some company-specific growth. Over the past few years, Aeroporto Guglielmo Marconi di Bologna increased its bottom line faster than revenue by effectively controlling its costs. This resulted in a margin expansion and profitability over time. Inspecting growth from a sector-level, the Italian infrastructure industry has been growing its average earnings by double-digit 25.10% in the past year, and 18.07% over the past five. This growth is a median of profitable companies of 8 Infrastructure companies in IT including Safe Bag, Ansaldo STS and Atlantia. This shows that whatever tailwind the industry is profiting from, Aeroporto Guglielmo Marconi di Bologna is able to amplify this to its advantage.
BIT:ADB Income Statement Export July 30th 18 In terms of returns from investment, Aeroporto Guglielmo Marconi di Bologna has not invested its equity funds well, leading to a 9.58% return on equity (ROE), below the sensible minimum of 20%. However, its return on assets (ROA) of 6.49% exceeds the IT Infrastructure industry of 5.67%, indicating Aeroporto Guglielmo Marconi di Bologna has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Aeroporto Guglielmo Marconi di Bologna’s debt level, has increased over the past 3 years from 6.39% to 10.57%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 36.64% to 15.36% over the past 5 years.
What does this mean?
Though Aeroporto Guglielmo Marconi di Bologna’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Aeroporto Guglielmo Marconi di Bologna gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Aeroporto Guglielmo Marconi di Bologna to get a more holistic view of the stock by looking at: