Despite posting healthy earnings, Worthington Steel, Inc.'s (NYSE:WS ) stock has been quite weak. Our analysis suggests that there are some reasons for hope that investors should be aware of.

How Do Unusual Items Influence Profit?

For anyone who wants to understand Worthington Steel's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by US$28m due to unusual items. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And that's hardly a surprise given these line items are considered unusual. If Worthington Steel doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

Our Take On Worthington Steel's Profit Performance

Because unusual items detracted from Worthington Steel's earnings over the last year, you could argue that we can expect an improved result in the current quarter. Because of this, we think Worthington Steel's earnings potential is at least as good as it seems, and maybe even better! At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. If you'd like to know more about Worthington Steel as a business, it's important to be aware of any risks it's facing. When we did our research, we found 2 warning signs for Worthington Steel (1 is a bit unpleasant!) that we believe deserve your full attention.

This note has only looked at a single factor that sheds light on the nature of Worthington Steel's profit. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying to be useful.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.