Lumentum Holdings Inc (LITE)
Return on total capital
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -179,100 | -371,900 | -66,900 | 315,300 | 529,800 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,134,700 | 957,300 | 1,355,800 | 1,875,000 | 1,972,800 |
| Return on total capital | -15.78% | -38.85% | -4.93% | 16.82% | 26.86% |
June 30, 2025 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-179,100K ÷ ($—K + $1,134,700K)
= -15.78%
The analysis of Lumentum Holdings Inc.'s return on total capital over the period from June 30, 2021, to June 30, 2025, reveals significant fluctuations indicative of shifts in the company's operational efficiency and profitability.
As of June 30, 2021, the company's return on total capital stood at 26.86%, reflecting a robust utilization of its total capital base to generate earnings. This high level of return suggests that, during this period, Lumentum was effectively deploying its capital to produce substantial profits, likely supported by favorable market conditions or strong operational performance.
By June 30, 2022, the return diminished considerably to 16.82%. Although still positive, this decline signals a reduction in the company's capital efficiency, potentially due to market challenges, increased costs, or strategic changes affecting profitability.
The situation further deteriorated by June 30, 2023, with a negative return of -4.93%. This indicates that the company's operations were not only less profitable but also potentially incurring losses relative to its total capital base. Such a shift could point to deteriorating market conditions, increased competitive pressures, or restructuring efforts affecting profitability.
Between June 30, 2024, and June 30, 2025, the negative trend deepened, with the return reaching -38.85% and then slightly improving to -15.78%. The significant negative values imply a substantial decline in profitability and capital efficiency, possibly reflecting ongoing operational challenges, adverse market developments, or macroeconomic factors impacting performance.
Overall, the trajectory from a strong positive return to increasingly negative figures indicates a period of considerable operational and financial difficulty for Lumentum Holdings Inc. The trend underscores the importance of analyzing underlying factors such as revenue generation, cost management, and strategic positioning to understand the causes behind this decline and assess the company's potential for recovery.
Peer comparison
Jun 30, 2025