When Teleflex Incorporated (NYSE:TFX) released its most recent earnings update (01 October 2017), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Teleflex’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not TFX actually performed well. Below is a quick commentary on how I see TFX has performed. View our latest analysis for Teleflex

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

For the purpose of this commentary, I like to use 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 method enables me to analyze many different companies on a more comparable basis, using the latest information. “For Teleflex, its “, most recent twelve-month earnings is $259.0M, which, relative to the prior year’s level, has fallen by -2.30%. Given that these figures may be fairly myopic, I’ve calculated an annualized five-year figure for TFX’s earnings, which stands at $126.4M. This suggests that while earnings declined against the prior year, in the long run, Teleflex’s earnings have been rising on average.

What’s enabled this growth? Let’s see whether it is solely a result of industry tailwinds, or if Teleflex has seen some company-specific growth. Over the last few years, Teleflex expanded its bottom line faster than revenue by effectively controlling its costs. This has led to a margin expansion and profitability over time. Looking at growth from a sector-level, the US medical equipment industry has been growing its average earnings by double-digit 18.95% in the past year, and a more subdued 9.07% over the past five years. This suggests that any tailwind the industry is profiting from, Teleflex has not been able to reap as much as its industry peers.

What does this mean?

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

1. Future Outlook: What are well-informed industry analysts predicting for TFX’s future growth? Take a look at our free research report of analyst consensus for TFX’s outlook.

2. Financial Health: Is TFX’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.