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When Autoneum Holding AG (SWX:AUTN) announced its most recent earnings (31 December 2017), I did two things: looked at its past earnings track record, then look at what is happening in the industry. Understanding how Autoneum Holding performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see AUTN has performed. Check out our latest analysis for Autoneum Holding
Was AUTN weak performance lately part of a long-term decline?
I use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This blend enables me to assess various companies on a similar basis, using the latest information. For Autoneum Holding, its most recent earnings (trailing twelve month) is CHF91.30M, which, relative to the previous year’s figure, has fallen by -4.70%. Given that these values may be fairly short-term, I’ve created an annualized five-year figure for AUTN’s net income, which stands at CHF39.35M This shows that although earnings declined against the previous year, in the long run, Autoneum Holding’s profits have been increasing on average.
What’s enabled this growth? Let’s take a look at if it is merely attributable to an industry uplift, or if Autoneum Holding has seen some company-specific growth. Over the last couple of years, Autoneum Holding grew its bottom line faster than revenue by efficiently controlling its costs. This brought about a margin expansion and profitability over time. Inspecting growth from a sector-level, the CH auto components industry has been enduring some headwinds in the previous twelve months, leading to an average earnings drop of -2.76%. This is a significant change, given that the industry has constantly been delivering a a notable growth of 13.84% in the previous five years. This suggests that whatever near-term headwind the industry is experiencing, it’s hitting Autoneum Holding harder than its peers.
What does this mean?
Autoneum Holding’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 capricious earnings, can have many factors affecting its business. I recommend you continue to research Autoneum Holding to get a more holistic view of the stock by looking at:
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1. Future Outlook: What are well-informed industry analysts predicting for AUTN’s future growth? Take a look at our free research report of analyst consensus for AUTN’s outlook.
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2. Financial Health: Is AUTN’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.
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3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.