Huntington Ingalls Industries, Inc.'s (NYSE:HII) robust earnings report didn't manage to move the market for its stock. We did some digging, and we found some concerning factors in the details.

The Impact Of Unusual Items On Profit

To properly understand Huntington Ingalls Industries' profit results, we need to consider the US$143m gain attributed to unusual items. While we like to see profit increases, we tend to be a little more cautious when unusual items have made a big contribution. We ran the numbers on most publicly listed companies worldwide, and it's very common for unusual items to be once-off in nature. And that's as you'd expect, given these boosts are described as 'unusual'. If Huntington Ingalls Industries doesn't see that contribution repeat, then all else being equal we'd expect its profit to drop over the current 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 Huntington Ingalls Industries' Profit Performance

Arguably, Huntington Ingalls Industries' statutory earnings have been distorted by unusual items boosting profit. Because of this, we think that it may be that Huntington Ingalls Industries' statutory profits are better than its underlying earnings power. The good news is that, its earnings per share increased by 18% in the last year. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. For example - Huntington Ingalls Industries has 2 warning signs we think you should be aware of.

Today we've zoomed in on a single data point to better understand the nature of Huntington Ingalls Industries' profit. But there is always more to discover if you are capable of focussing your mind on minutiae. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying.

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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.