AntarChile's (SNSE:ANTARCHILE) Soft Earnings Don't Show The Whole Picture

Shareholders appeared unconcerned with AntarChile S.A.'s (SNSE:ANTARCHILE) lackluster earnings report last week. We think that the softer headline numbers might be getting counterbalanced by some positive underlying factors.

See our latest analysis for AntarChile

The Impact Of Unusual Items On Profit

Importantly, our data indicates that AntarChile's profit was reduced by US$201m, due to unusual items, over the last year. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. 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 AntarChile 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 AntarChile's Profit Performance

Unusual items (expenses) detracted from AntarChile's earnings over the last year, but we might see an improvement next year. Because of this, we think AntarChile's earnings potential is at least as good as it seems, and maybe even better! And on top of that, its earnings per share have grown at 11% per year over the last three years. 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. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For instance, we've identified 4 warning signs for AntarChile (2 make us uncomfortable) you should be familiar with.

Today we've zoomed in on a single data point to better understand the nature of AntarChile'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.