The most recent earnings report from CSSC Offshore & Marine Engineering (Group) Company Limited (HKG:317) was disappointing for shareholders. Despite the soft profit numbers, our analysis has optimistic about the overall quality of the income statement.
Check out our latest analysis for CSSC Offshore & Marine Engineering (Group)
The Impact Of Unusual Items On Profit
For anyone who wants to understand CSSC Offshore & Marine Engineering (Group)'s profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by CN¥16m 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 that's hardly a surprise given these line items are considered unusual. Assuming those unusual expenses don't come up again, we'd therefore expect CSSC Offshore & Marine Engineering (Group) to produce a higher profit next year, all else being equal.
Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of CSSC Offshore & Marine Engineering (Group).
Our Take On CSSC Offshore & Marine Engineering (Group)'s Profit Performance
Unusual items (expenses) detracted from CSSC Offshore & Marine Engineering (Group)'s earnings over the last year, but we might see an improvement next year. Because of this, we think CSSC Offshore & Marine Engineering (Group)'s earnings potential is at least as good as it seems, and maybe even better! Unfortunately, though, its earnings per share actually fell back over 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. If you'd like to know more about CSSC Offshore & Marine Engineering (Group) as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 1 warning sign for CSSC Offshore & Marine Engineering (Group) you should be aware of.
Today we've zoomed in on a single data point to better understand the nature of CSSC Offshore & Marine Engineering (Group)'s profit. But there are plenty of other ways to inform your opinion of a company. 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 with high insider ownership.
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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.