Revenue Growth

RECENT NEWS
Reuters  4 hrs ago  Comment 
Energy conglomerate Reliance Industries Ltd posted a 13.7 percent rise in quarterly net profit, beating street expectations, helped by strong revenue growth in its refining and oil and gas businesses.
newratings.com  Jul 18  Comment 
Carl Zeiss Meditec reports revenue growth of 3.8% for 9M 2013/14 - EBIT close to previous year's level - EPS decline by 13% Carl Zeiss Meditec AG / Key word(s): 9-month figures/Preliminary Results 18.07.2014 13:28 Dissemination of an Ad...
SeekingAlpha  Jul 18  Comment 
By Alexander J. Poulos: Patience is one of the key traits an investor must possess. The market is full of pitfalls, leading to an investor prematurely selling out of what would be a winning position. The article below will discuss International...
Wall Street Journal  Jul 18  Comment 
Google reported second-quarter revenue growth of 22%, exceeding expectations, as the world's largest online-search provider continues to benefit from the booming growth in mobile and video advertising.
Wall Street Journal  Jul 17  Comment 
Google reported second-quarter revenue growth of 22%, exceeding expectations, as the world's largest online-search provider continues to benefit from the booming growth in mobile and video advertising.
The Hindu Business Line  Jul 17  Comment 
Prabhudas LilladherNIIT Technologies (Buy)CMP: ₹389.45Target: ₹440NIIT Tech reported a revenue growth of 1.4 per cent q-o-q to $96.5 million (PL estimate: $99.4...
The Economic Times  Jul 17  Comment 
"The revenue growth has been clearly above our forecast by more than a per cent and it does seem that it is carried through the bottom line as well."
Wall Street Journal  Jul 16  Comment 
EBay reported another profitable period, driven by payments unit PayPal.
Wall Street Journal  Jul 16  Comment 
The flash-memory maker reported a profit of $273.9 million, or $1.14 a share, thanks to revenue growth and stronger margins.
SeekingAlpha  Jul 15  Comment 
By eWhispers: The consensus earnings estimate for AutoNation (NYSE:AN) has edged higher by a penny since the start of the second quarter to $0.87 per share, with revenue estimated to be $4.79 billion, which represents 19.2% year-over-year...




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Revenue Growth is the percent increase (or decrease) in a company's revenue between two or more equivalent fiscal periods

Revenue Growth is used to measure how fast a company's business is expanding. The figure shows the annual rate of increase/decrease in a company's revenue or sales growth. The figures give analysts, investors and participants an idea of how much a company's sales are increasing over time.

While revenue growth tends to fluctuate from fiscal year to fiscal year and fiscal quarter to fiscal quarter, investors look for trends in revenue growth as a means of gauging the company's growth over proscribed periods of time. All other things being equal, a company that is able to continually grow its revenue should see equivalent increases in net income.

Rate of Revenue Growth

Taking the derivative of the revenue growth gives you the rate of revenue growth, which tells you how much the rate of revenue growth is changing. Investors look at this figure to gauge a potential forthcoming change in earnings growth. If a company that has been able to consistently grow its revenues at some pace begins to see smaller revenue growth over one or more fiscal periods, it may be an indicator that the growth itself will continue to decrease over time, or that it has plateaued.

Example

Company ABC generated $100 billion in revenue during its third quarter of 2005 and $120 billion in the fourth quarter that year, the company saw quarterly revenue growth of 20% sequentially.

If Company ABC generated $150 billion in the fourth quarter of 2004, the company would have seen its revenue increase 50% on a year-over-year basis

Revenue Growth Calculation on Wikinvest

Wikinvest calculates revenue growth as the growth of trailing twelve months of revenue. The treatment is different from Yahoo! Finance which calculates quarterly year-over-year growth. The following example will illustrate the difference:

' 2006 2007 2008
Q1$100m$104m$144m
Q2$120m$142m$120m
Q3$130m$140m
Q4$140m$170m

Q2 2008 is the most recent quarter. In this case, Yahoo! Finance would calculate revenue growth as -15.5% [(120-142)/142].

Wikinvest, on the other hand would calculate the growth as 11.2%. This is because wikinvest calculates the growth based on the revenue generated in the last twelve months. In this case, Q3 07, Q4 07, Q1 08 and Q2 08. Specially, it is calculated as:

Revenue growth = ((120+144+170+140)-(142+104+140+130))/(142+104+140+130) = 11.2%

Taking the growth based on trailing twelve months of revenue mitigates undue fluctuations that may affect a single quarter.

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