Additional Considerations Required While Assessing Helbor Empreendimentos' (BVMF:HBOR3) Strong Earnings

Despite posting some strong earnings, the market for Helbor Empreendimentos S.A.'s (BVMF:HBOR3) stock hasn't moved much. Our analysis suggests that this might be because shareholders have noticed some concerning underlying factors.

See our latest analysis for Helbor Empreendimentos

The Impact Of Unusual Items On Profit

For anyone who wants to understand Helbor Empreendimentos' profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from R$28m worth of unusual items. While we like to see profit increases, we tend to be a little more cautious when unusual items have made a big contribution. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And that's as you'd expect, given these boosts are described as 'unusual'. Assuming those unusual items don't show up again in the current year, we'd thus expect profit to be weaker next year (in the absence of business growth, that is).

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 Helbor Empreendimentos' Profit Performance

Arguably, Helbor Empreendimentos' statutory earnings have been distorted by unusual items boosting profit. Therefore, it seems possible to us that Helbor Empreendimentos' true underlying earnings power is actually less than its statutory profit. But at least holders can take some solace from the 32% EPS growth in the last year. 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 Helbor Empreendimentos as a business, it's important to be aware of any risks it's facing. Our analysis shows 3 warning signs for Helbor Empreendimentos (1 is a bit concerning!) and we strongly recommend you look at these before investing.

This note has only looked at a single factor that sheds light on the nature of Helbor Empreendimentos' 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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.