The most recent earnings report from B-SOFT Co.,Ltd. (SZSE:300451) was disappointing for shareholders. While the headline numbers were soft, we believe that investors might be missing some encouraging factors.
The Impact Of Unusual Items On Profit
For anyone who wants to understand B-SOFTLtd's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by CN¥36m due to unusual items. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. 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. In the twelve months to December 2023, B-SOFTLtd had a big unusual items expense. All else being equal, this would likely have the effect of making the statutory profit look worse than its underlying earnings power.
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 B-SOFTLtd's Profit Performance
As we mentioned previously, the B-SOFTLtd's profit was hampered by unusual items in the last year. Based on this observation, we consider it possible that B-SOFTLtd's statutory profit actually understates its earnings potential! On the other hand, its EPS actually shrunk in the last twelve months. 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 want to do dive deeper into B-SOFTLtd, you'd also look into what risks it is currently facing. Case in point: We've spotted 1 warning sign for B-SOFTLtd you should be aware of.
This note has only looked at a single factor that sheds light on the nature of B-SOFTLtd's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. 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.