When Integrated Media Technology Limited (ASX:ITL) announced its most recent earnings (30 June 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well Integrated Media Technology has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I’ve summarized the key takeaways on how I see ITL has performed. View our latest analysis for Integrated Media Technology

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

I look at the ‘latest twelve-month’ data, 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 examine different companies in a uniform manner using new information. “For Integrated Media Technology, its “, most recent earnings is A$3.1M, which, in comparison to the prior year’s figure, has declined by a non-trivial -33.18%. Given that these figures are somewhat nearsighted, I’ve created an annualized five-year value for Integrated Media Technology’s earnings, which stands at A$0.9M. This means that even though earnings declined from the prior year, over the long run, Integrated Media Technology’s profits have been growing on average.

What’s the driver of this growth? Let’s see whether it is solely due to an industry uplift, or if Integrated Media Technology has experienced some company-specific growth. The ascend in earnings seems to be driven by a substantial top-line increase outstripping its growth rate of costs. Though this resulted in a margin contraction, it has made Integrated Media Technology more profitable. Viewing growth from a sector-level, the Australian media industry has been enduring some headwinds over the prior year, leading to an average earnings drop of -6.33%. This is a major change, given that the industry has constantly been delivering a a solid growth of 25.67% in the previous few years. This means whatever recent headwind the industry is experiencing, it’s hitting Integrated Media Technology harder than its peers.

What does this mean?

Though Integrated Media Technology’s past data is helpful, it is only one aspect of my investment thesis. Companies are profitable, but have unpredictable earnings, can have many factors impacting its business. I suggest you continue to research Integrated Media Technology to get a more holistic view of the stock by looking at: