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Return On Capital Employed Overview: Novavax

Benzinga Insights
·1 min read

During Q3, Novavax's (NASDAQ: NVAX) reported sales totaled $157.02 million. Despite a 1039.03% in earnings, the company posted a loss of $193.94 million. In Q2, Novavax brought in $35.54 million in sales but lost $17.03 million in earnings.

What Is ROCE?

Changes in earnings and sales indicate shifts in Novavax’s Return on Capital Employed, a measure of yearly pre-tax profit relative to capital employed by a business. Generally, a higher ROCE suggests successful growth of a company and is a sign of higher earnings per share in the future. In Q3, Novavax posted an ROCE of -0.63%.

It is important to keep in mind ROCE evaluates past performance and is not used as a predictive tool. It is a good measure of a company's recent performance, but several factors could affect earnings and sales in the near future.

View more earnings on NVAX

Return on Capital Employed is an important measurement of efficiency and a useful tool when comparing companies that operate in the same industry. A relatively high ROCE indicates a company may be generating profits that can be reinvested into more capital, leading to higher returns and growing EPS for shareholders.

In Novavax's case, the ROCE ratio shows the amount of assets may not be helping the company achieve higher returns. Investors may take this into account before making any long-term financial decisions.

Q3 Earnings Recap

Novavax reported Q3 earnings per share at $-3.21/share, which did not meet analyst predictions of $1.73/share.

See more from Benzinga

© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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  • Citigroup Execs Tried to ‘Lessen the Pain’ of $900 Million Error

    (Bloomberg) -- Two days after one of his employees mistakenly approved a $900 million payment to a group of Revlon Inc. lenders, Citigroup Inc. executive Vincent Farrell was looking to report some good news about the bank’s recovery effort.“Quick update, just crossed the 100MM mark,” Farrell, head of North American loan operations, said in an instant message to his boss.“Good,” Brendan Zeigon, who oversees global loan operations and credit risk management services, messaged back. “I would love to get to 200.”The two were in a fix. An executive was “on a war path” over the error -- one of the biggest in the industry in recent memory -- which happened as Citigroup was trying to make a periodic interest payment. Instead the bank wound up sending the creditors the full amount they were owed, more than 100 times what it intended to distribute. And, as administrative agent on the loan, it had come out of its own pocket.Danielle Romero-Apsilos, a spokeswoman for Citigroup, declined to comment.‘Lessen the Pain’The chats were included as exhibits in a trial this week over Citigroup’s efforts to recover the funds, of which it has gotten back about $390 million. It has sued 10 asset managers for creditors that are hanging on to $508 million. The messages shed light on the internal tensions that roiled one of the world’s most important financial institutions in the days after it watched almost a billion dollars fly out the door.The transfer was wired on Aug. 11. By late afternoon on Aug. 13, Farrell and Zeigon still seemed hopeful they’d be able to reclaim most of the money.“Well 15% back on day 1 is good ish,” Zeigon said. “Let’s hope to get 50% by tomorrow..will lessen the pain for you and i.”Read More: Citi’s $900 Million Misfire Happened During Software SwitchCitigroup made the error despite an approval process known inside the bank as “six eyes,” under which three people must be involved in reviewing and executing wire transfers that originate in the asset-based transitional finance group. The final set of eyes on the Revlon transfer was Vinny Fratta, a senior manager in global loan operations who reports to Farrell. Fratta testified that the payment was the result of “human error, and that I was one of the humans responsible for the error.”‘What Would It Take?’When asked whether he had been involved in talks about Fratta’s employment status since the error, Farrell told the court on Wednesday that he had taken part in discussions about Fratta’s performance. Asked if Citigroup was holding off on firing Fratta until after the trial, he said he didn’t know.“It would be good to get at least half back by tomorrow,” Zeigon reiterated in the chat on Aug. 13. “We should get as many people hitting phones as needed.”But by the next day, the outlook hadn’t improved. The funds were digging in, an administrator told Fratta in an email.“They’ve pretty much said they aren’t returning at this time because they aren’t positive it was an error,” he said.In a reply noting that the bank had alerted the lenders to the mistake and that the Wall Street Journal had called it that, too, Fratta asked: “What would it take for them to be positive that it was an error?”Read MoreBank Error in Your Favor: Citi’s Fight to Reclaim $900 MillionQuickTake: ‘Unjust Enrichment’ and Citi’s $900 Million MistakeRevlon Lenders Allege Default With Debt Deal Nearing CloseFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Mnuchin Would Not Have Made $700M Loan To YRC

    In a largely uncontentious commission hearing Thursday over the national security loan program, Treasury Secretary Steven Mnuchin acknowledged the $700 million loan made to less-than-truckload carrier YRC Worldwide (NASDAQ: YRCW) was "risky" and one that he would have not made.Facing questions from the oversight commission tasked with monitoring the distribution of federal loans established under the Coronavirus Aid, Relief and Economic Security (CARES) Act, Mnuchin said he was encouraged by members of Congress to take losses on the loans as the program's intent was to address an immediate liquidity crisis. He said some of the lending programs afforded under the act were done with the analysis that they would lose money.Referring to his former banking and lending days, Mnuchin said, "If my bank had been underwriting this loan, we would have not made this loan."National security designation The point of the hearing was to examine loans to "businesses critical to maintaining national security," a subtitle in the legislation that allotted $17 billion in federal money for companies fitting the designation. Mnuchin said he collaborated with the Department of Defense to establish the criteria for such companies, but it was ultimately former Defense Secretary Mark Esper who recommended and certified YRC met the standard.In prior oversight reports, the commission has called into question YRC's designation as such a company. YRC provides 68% of the Defense Department's LTL services hauling food, electronics and other supplies domestically for the military, a task commission members have suggested could be done by other carriers.Mnuchin referred the commission to the Defense Department for further clarity on the designation as it made the decision.The Defense Department was also invited to testify at the hearing, but stated it was unable to attend. The commission plans to hold a separate hearing for the Defense Department at a future date, but noted that the department is "currently resisting making public" a transcript from the upcoming hearing.Concerns with underwriting guidelines for YRC loanSen. Pat Toomey, R-Pa., questioned some of the underwriting standards, noting five of the companies receiving loans lost money in the year prior to the decision, two were startups and some received more in loans than they made in revenue.Mnuchin said that the underwriting criteria established by Treasury was sufficient, noting that of the 74 applicants under the subtitle, only 11 were approved. He said Treasury had a hard time distinguishing between COVID-related impairments to a business' 2020 expectations versus something that could be more structural in nature.On YRC, Rep. French Hill, R-Ark., questioned the collateral on the loan and whether it protected taxpayers. He said the company was allowed to borrow on its accounts receivable and the valuation of its real estate at 100 cents on a dollar. He also wondered if the value of the YRC fleet was reasonable given its age. Hill pegged total collateral pledged on the loan at roughly $1.1 billion, not the $1.6 billion that Treasury previously claimed.Hill continued questioning the rationale of making such a large loan to a company "rated speculatively" for the past 20 years and one that has been "hanging on by a thread since the global financial crisis.""The only way YRC has survived for the last 10 years is through bailouts by the government and the private equity industry," Hill continued. He contended YRC is "staying afloat by providing the cheapest pricing," stating that investment research shows the company charges about 18 cents per pound versus the average of its competitors, which is in the mid-20 cent range.Mnuchin said that the loan was undertaken with the added risk in mind and believes the collateral provided was adequate, pointing to the 30% equity position Treasury received from YRC as part of the loan agreement. That stock is now worth $100 million as the company's shares have tripled since the loan announcement. Mnuchin acknowledged the rebound in the economy and at YRC has been "fortunate."YRC's ties to the White HouseBharat Ramamurti, an attorney tasked with serving on the commission, asked Mnuchin if he had been contacted by President Trump's senior adviser and son-in-law, Jared Kushner, regarding the YRC loan. He asserted Kushner has "close ties" to Apollo Global Management (NYSE: APO), which provided YRC with a $600 million term loan in September.Mnuchin said no one from Kushner's staff had reached out to him. Mnuchin acknowledged the loan was risky but that it was not a bailout of private equity. He said Treasury was tasked with moving very fast in uncertain and tough times and that many lawmakers spoke up on YRC's behalf, noting a loan to the company would save many union jobs.Ramamurti asked Mnuchin if anyone from the White House had contacted him regarding the loan. Mnuchin said he would turn over any correspondence with the White House to the commission.YRC CEO Darren Hawkins was named to the president's Great American Economic Revival task force in April and former YRC Chairman and CEO Bill Zollars was appointed by the president and confirmed by the Senate to the U.S. Postal Service board of governors in June.Hindsight on the loan program and next stepsAsked what he would have done differently, Mnuchin said, "I would use the same criteria" all over again. He said he could have made up to $5 trillion in loans in total, but believes Treasury's underwriting decisions were prudent and saved many jobs. He acknowledged many complaints around the handling of the distribution, with some saying he took on too much risk for loss and others saying he didn't take on enough.Mnuchin said he would advise the next Treasury secretary to sell the YRC loan and liquidate the equity position. He sees a "significant profit" to taxpayers in doing so. He also said Treasury doesn't want to be in the long-term business of making these types of loans.Mnuchin advised the Pentagon to look at all its vendors and spread the risk over multiple vendors when possible.The office of the director of National Intelligence responded that it would not attend Thursday's hearing. However, it told the commission that it hasn't designated any company critical to national security and didn't give any input in the Defense Department's designations.Click for more FreightWaves articles by Todd Maiden. * Hub Group's $95M acquisition is path to being a last-mile market leader * Daseke turnaround nets ‘positive outlook' from ratings agency * Old Dominion sees tonnage accelerate from August inflectionSee more from Benzinga * Click here for options trades from Benzinga * UPS Begins Nationwide Shipping Of Vaccine Kits * Rehearsal Exposes Gaps In COVID Vaccine Delivery(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  • What to Do When a Bear Market Whacks Your 401(k)

    When the markets take a dive, your retirement savings could drop with them. Here is a four-step plan to beat the bear.

  • Cramer Says Time To Take Profit In These Electric Vehicle SPAC Stocks

    Jim Cramer recommended Thursday that investors trim their exposure to auto-related special purpose acquisition company stocks, CNBC reported.What Happened: The host of the CNBC "Mad Money" show termed the stocks of QuantumScape Corporation (NYSE: QS), Luminar Technologies Inc (NASDAQ: LAZR), and SPACs of Arrival and Canoo as speculative."These stocks have gotten out of control, so I'm begging you to take something off the table," urged the former hedge fund manager.Cramer asked investors to be responsible speculators. "Speculative stocks can get overheated, which is why it's important to take profits while you have them," he advised.Why It Matters: The former hedge fund manager has endorsed the four electric vehicle startups which are taking the SPAC route since October, noted CNBC.He recommended the Bill Gates and Volkswagen AG (OTC: VWAGY)-backed QuantumScape in late October, which merged with Kensington Capital to go public.A week ago he recommended Luminar and said the stock was a Buy at $15. The autonomous vehicle sensor company went public through a SPAC earlier this month. United Parcel Service, Inc (NYSE: UPS)-backed Arrival, a U.K.-based EV maker specializing in microfactories, plans to go public through a merger with CIIG Merger Corp (NASDAQ: CIIC). Cramer had recommended the SPAC stock last week at $17.50.Cramer also recommended Canoo Holdings Ltd, a California-based EV startup, set to merge with Hennessy Capital Acquisition Corp IV (NASDAQ: HCAC). The stock was termed a Buy by Cramer last Friday at $15.64."You can always get back in at lower levels, and I'm very confident that lower prices could be in the cards," Cramer recommends to investors.Price Action: On Thursday, QuantumScape shares closed 1.96% higher at $76.61. Luminar Technologies shares closed 7.45% lower at $34.17 extending the fall in the after-hours session by almost 7% to $31.78.CIIG Merger shares fell 1.63% to $31.38 in the regular session. On the same day, Hennessy Capital shares closed 10% higher at $22 and fell 6.82% to $20.50 in the after-hours session.Click here to check out Benzinga's EV Hub for the latest electric vehicles news.See more from Benzinga * Click here for options trades from Benzinga * Cramer Says This EV Startup Has The 'Best Claim To Be The Son Of Tesla,' Gives Blessing To Buy SPAC Stock(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  • Wall Street Is Starting to Sour on Airline Stocks. Here’s Why.

    While analysts expect a recovery for carriers like Delta, United, and American Airlines, it might not be as quick as some hope.

  • Boeing, Best Buy: Latest Upgrades and Downgrades

    TheStreet's weekly guide to upgrades, downgrades and price-target changes includes Boeing, Best Buy and DraftKings.

  • From Airbnb to Tesla, It’s Starting to Feel Like 1999 All Over Again. It May End the Same Way.

    The dot-com stocks were money-losing, cash-burning, crazily priced internet plays. Today’s crop of hot stocks are substantial, innovative companies. What the two have in common: stratospheric market valuations.

  • Analyst Worries About Snowflake Stock IPO Lockup Agreement Expiring

    Amid the boom in IPO stocks, some analysts are calling attention to dates when lockup agreements on insiders selling stock expire. One analyst downgraded Snowflake on its float jumping in March.