Shareholders Will Be Pleased With The Quality of Yduqs Participações' (BVMF:YDUQ3) Earnings

Even though Yduqs Participações S.A.'s (BVMF:YDUQ3) recent earnings release was robust, the market didn't seem to notice. Our analysis suggests that investors might be missing some promising details.

View our latest analysis for Yduqs Participações

The Impact Of Unusual Items On Profit

Importantly, our data indicates that Yduqs Participações' profit was reduced by R$177m, 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. If Yduqs Participações doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming 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 Yduqs Participações' Profit Performance

Because unusual items detracted from Yduqs Participações' earnings over the last year, you could argue that we can expect an improved result in the current quarter. Because of this, we think Yduqs Participações' earnings potential is at least as good as it seems, and maybe even better! And on top of that, its earnings per share increased by 9.2% 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. With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. When we did our research, we found 4 warning signs for Yduqs Participações (1 is significant!) that we believe deserve your full attention.

Today we've zoomed in on a single data point to better understand the nature of Yduqs Participações' 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 with significant insider holdings 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.