PharmaBlock Sciences (Nanjing), Inc.'s (SZSE:300725) recent earnings report didn't offer any surprises, with the shares unchanged over the last week. Our analysis suggests that shareholders might be missing some positive underlying factors in the earnings report.

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The Impact Of Unusual Items On Profit

For anyone who wants to understand PharmaBlock Sciences (Nanjing)'s profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by CN¥69m due to unusual items. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And, after all, that's exactly what the accounting terminology implies. If PharmaBlock Sciences (Nanjing) 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 PharmaBlock Sciences (Nanjing)'s Profit Performance

Unusual items (expenses) detracted from PharmaBlock Sciences (Nanjing)'s earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that PharmaBlock Sciences (Nanjing)'s statutory profit actually understates its earnings potential! And on top of that, its earnings per share increased by 8.4% in the last year. 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 PharmaBlock Sciences (Nanjing) as a business, it's important to be aware of any risks it's facing. You'd be interested to know, that we found 3 warning signs for PharmaBlock Sciences (Nanjing) and you'll want to know about them.

Today we've zoomed in on a single data point to better understand the nature of PharmaBlock Sciences (Nanjing)'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 with significant insider holdings 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.