Some May Be Optimistic About Sudatel Telecom Group's (ADX:SUDATEL) Earnings

Shareholders appeared unconcerned with Sudatel Telecom Group Limited's (ADX:SUDATEL) lackluster earnings report last week. We think that the softer headline numbers might be getting counterbalanced by some positive underlying factors.

Check out our latest analysis for Sudatel Telecom Group

The Impact Of Unusual Items On Profit

For anyone who wants to understand Sudatel Telecom Group's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by US$26m 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 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 Sudatel Telecom 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 Sudatel Telecom Group.

Our Take On Sudatel Telecom Group's Profit Performance

Unusual items (expenses) detracted from Sudatel Telecom Group's earnings over the last year, but we might see an improvement next year. Because of this, we think Sudatel Telecom 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. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. If you'd like to know more about Sudatel Telecom Group as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 4 warning signs for Sudatel Telecom Group you should be mindful of and 1 of these is a bit concerning.

Today we've zoomed in on a single data point to better understand the nature of Sudatel Telecom Group's 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.