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FirstEnergy ROIC %

: 3.22% (As of Jun. 2022)
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ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. FirstEnergy's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2022 was 3.22%.

As of today (2022-08-14), FirstEnergy's WACC % is 3.92%. FirstEnergy's ROIC % is 4.25% (calculated using TTM income statement data). FirstEnergy generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.


FirstEnergy ROIC % Historical Data

The historical data trend for FirstEnergy's ROIC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

FirstEnergy Annual Data
Trend Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21
ROIC %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -1.08 3.87 3.56 3.45 4.01

FirstEnergy Quarterly Data
Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22
ROIC % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1.88 4.81 4.94 3.90 3.22

Competitive Comparison

For the Utilities - Regulated Electric subindustry, FirstEnergy's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

FirstEnergy ROIC % Distribution

For the Utilities - Regulated industry and Utilities sector, FirstEnergy's ROIC % distribution charts can be found below:

* The bar in red indicates where FirstEnergy's ROIC % falls into.



FirstEnergy ROIC % Calculation

FirstEnergy's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2021 is calculated as:

ROIC % (A: Dec. 2021 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Dec. 2020 ) + Invested Capital (A: Dec. 2021 ))/ count )
=2229 * ( 1 - 20.53% )/( (43793 + 44516)/ 2 )
=1771.3863/44154.5
=4.01 %

where

FirstEnergy's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Jun. 2022 is calculated as:

ROIC % (Q: Jun. 2022 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Mar. 2022 ) + Invested Capital (Q: Jun. 2022 ))/ count )
=1788 * ( 1 - 20.33% )/( (44475 + 43883)/ 2 )
=1424.4996/44179
=3.22 %

where

Note: The Operating Income data used here is four times the quarterly (Jun. 2022) data.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


FirstEnergy  (NYSE:FE) ROIC % Explanation

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.

There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.

Why is ROIC % important?

Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, FirstEnergy's WACC % is 3.92%. FirstEnergy's ROIC % is 4.25% (calculated using TTM income statement data). FirstEnergy generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases. FirstEnergy earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Be Aware

Like ROE % and ROA %, ROIC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.


FirstEnergy ROIC % Related Terms

Thank you for viewing the detailed overview of FirstEnergy's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.


FirstEnergy Business Description

FirstEnergy logo
Address
76 South Main Street, Akron, OH, USA, 44308
FirstEnergy is one of the largest investor-owned utilities in the United States with 10 regulated distribution companies across six mid-Atlantic and Midwestern states. FirstEnergy also owns and operates one of the nation's largest electric transmission systems with 24,000 miles of lines.
Executives
Croom Jana T director 1205 KIMBALL BLVD. JASPER IN 47546
Klimczak Sean director C/O THE BLACKSTONE GROUP 345 PARK AVE. NEW YORK NY 10154
Hicks Lisa Winston director 76 S. MAIN ST AKRON OH 44308
Kaleta Paul J director P O BOX 30150 RENO NV 89520
Williams Melvin D. director 76 SOUTH MAIN STREET AKRON OH 44308
Teno Andrew director C/O FIR TREE INC. 55 WEST 46TH STREET, 29TH FLOOR NEW YORK NY 10036
Lynn Jesse director C/O ICAHN ENTERPRISES L.P. 16690 COLLINS AVE., PH SUNNY ISLES FL 33160
Somerhalder John W Ii director, officer: Vice Chair & Exec Director 76 SOUTH MAIN STREET AKRON OH 44308
Park Hyun officer: SVP & CLO 76 SOUTH MAIN STREET AKRON OH 44308
Turner Leslie M director THE HERSHEY COMPANY 100 CRYSTAL A DRIVE HERSHEY PA 17036
Mikkelsen Eileen officer: VP, Rates & Regulatory Affairs 76 SOUTH MAIN STREET AKRON OH 44308
Prezelj Irena officer: VP, Investor Relations 76 SOUTH MAIN STREET AKRON OH 44308
Walker Christine officer: VP, Human Resources 76 SOUTH MAIN STREET AKRON OH 44308
Belcher Samuel officer: SVP & President, FE Utilities 76 SOUTH MAIN STREET AKRON OH 44308
Lisowski Jason officer: VP, Controller & CAO 76 SOUTH MAIN STREET AKRON OH 44333

FirstEnergy Headlines

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