Soft earnings didn't appear to concern Xiamen Comfort Science&Technology Group Co., Ltd's (SZSE:002614) shareholders over the last week. Our analysis suggests that while the profits are soft, the foundations of the business are strong.
How Do Unusual Items Influence Profit?
Importantly, our data indicates that Xiamen Comfort Science&Technology Group's profit was reduced by CN¥80m, due to unusual items, over the last year. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And, after all, that's exactly what the accounting terminology implies. In the twelve months to March 2024, Xiamen Comfort Science&Technology Group had a big unusual items expense. As a result, we can surmise that the unusual items made its statutory profit significantly weaker than it would otherwise be.
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 Xiamen Comfort Science&Technology Group's Profit Performance
As we mentioned previously, the Xiamen Comfort Science&Technology Group's profit was hampered by unusual items in the last year. Because of this, we think Xiamen Comfort Science&Technology Group's underlying earnings potential is as good as, or possibly even better, than the statutory profit makes it seem! 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 Xiamen Comfort Science&Technology Group as a business, it's important to be aware of any risks it's facing. At Simply Wall St, we found 2 warning signs for Xiamen Comfort Science&Technology Group and we think they deserve your attention.
This note has only looked at a single factor that sheds light on the nature of Xiamen Comfort Science&Technology Group'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.