After reading Open Joint Stock Company Quadra – Power Generation’s (MISX:TGKD) most recent earnings announcement (30 June 2017), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether Quadra – Power Generation’s performance has been impacted by industry movements. In this article I briefly touch on my key findings. See our latest analysis for Quadra – Power Generation

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

I prefer to use the ‘latest twelve-month’ data, 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 blend enables me to analyze different companies on a similar basis, using the most relevant data points. For Quadra – Power Generation, its latest trailing-twelve-month earnings is -RUРУБ1.54B, which, in comparison to the prior year’s level, has become less negative. Since these figures may be somewhat short-term thinking, I have created an annualized five-year figure for TGKD’s earnings, which stands at -RUРУБ2.34B. This means that, though net income is negative, it has become less negative over the years.

We can further evaluate Quadra – Power Generation’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Quadra – Power Generation’s top-line has risen by a mere 3.88%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Looking at growth from a sector-level, the RU electric utilities industry has been growing its average earnings by double-digit 20.20% in the previous twelve months, and a more subdued 2.08% over the last five years. This means though Quadra – Power Generation is currently unprofitable, it may have benefited from industry tailwinds, moving earnings towards to right direction.

What does this mean?

Though Quadra – Power Generation’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always difficult to predict what will happen in the future and when. The most useful step is to examine company-specific issues Quadra – Power Generation may be facing and whether management guidance has regularly been met in the past. I suggest you continue to research Quadra – Power Generation to get a better picture of the stock by looking at: