Lumentum Holdings Inc (LITE)
Return on total capital
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -149,900 | -266,000 | -330,900 | -386,000 | -371,900 | -285,800 | -225,700 | -152,100 | -65,200 | 34,400 | 121,700 | 226,100 | 315,300 | 298,200 | 518,500 | 546,700 | 529,800 | 513,800 | 308,700 | 265,600 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,134,700 | 879,500 | 872,300 | 895,900 | 957,300 | 1,176,700 | 1,277,800 | 1,310,800 | 1,355,800 | 1,538,000 | 1,543,600 | 1,526,400 | 1,875,000 | 1,912,100 | 2,021,900 | 1,971,400 | 1,972,800 | 2,165,000 | 1,921,900 | 1,816,100 |
| Return on total capital | -13.21% | -30.24% | -37.93% | -43.09% | -38.85% | -24.29% | -17.66% | -11.60% | -4.81% | 2.24% | 7.88% | 14.81% | 16.82% | 15.60% | 25.64% | 27.73% | 26.86% | 23.73% | 16.06% | 14.62% |
June 30, 2025 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $-149,900K ÷ ($—K + $1,134,700K)
= -13.21%
The analysis of Lumentum Holdings Inc.'s return on total capital (ROTC) over the analyzed period reveals significant fluctuations, indicative of changing operational efficiencies and financial health. From September 30, 2020, to September 30, 2021, the company's ROTC demonstrated a generally positive trend, increasing from approximately 14.62% to a peak of 27.73%. This period reflects strong operational performance and effective utilization of both equity and debt capital, likely driven by growth in sales and margins.
Subsequently, the ROTC declined sharply, beginning in late 2021. By March 31, 2022, the rate had decreased to 15.60%, and further diminished to single digits by the end of 2022, reaching 7.88%. This downward trajectory continued into 2023, turning negative for the first time at -4.81% by June 30, 2023, and deepening to -11.60% by September 30, 2023. The persistent negative ROTC signals that the company was experiencing significant challenges in generating sufficient returns on its capital investments, possibly due to declining margins, reduced sales, or increased costs.
The negative trend persisted through 2024 and into 2025, with ROTC reaching as low as -43.09% on September 30, 2024. The continued decline indicates worsening operational efficiency and potentially, adverse market or internal factors that hinder effective capital deployment. While there is a marginal improvement projected in the second quarter of 2025, with the ROTC forecasted to improve to -13.21%, the overall pattern underscores a prolonged period of declining profitability relative to total capital employed.
This comprehensive assessment demonstrates a transition from robust positive returns through 2021 to a sustained period of negative returns starting in early 2022, highlighting significant deterioration in the company's capacity to generate gains on its invested capital over the observed period.
Peer comparison
Jun 30, 2025