Tianjin LVYIN Landscape and Ecology Construction's (SZSE:002887) Weak Earnings May Only Reveal A Part Of The Whole Picture

Last week's earnings announcement from Tianjin LVYIN Landscape and Ecology Construction Co., Ltd (SZSE:002887) was disappointing to investors, with a sluggish profit figure. Our analysis has found some reasons to be concerned, beyond the weak headline numbers.

Check out our latest analysis for Tianjin LVYIN Landscape and Ecology Construction

The Impact Of Unusual Items On Profit

Importantly, our data indicates that Tianjin LVYIN Landscape and Ecology Construction's profit received a boost of CN¥17m in unusual items, over the last year. 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 crunched the numbers on thousands of publicly listed companies, we found that a boost from unusual items in a given year is often not repeated the next year. And, after all, that's exactly what the accounting terminology implies. Tianjin LVYIN Landscape and Ecology Construction had a rather significant contribution from unusual items relative to its profit to June 2024. All else being equal, this would likely have the effect of making the statutory profit a poor guide to underlying earnings power.

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 Tianjin LVYIN Landscape and Ecology Construction's Profit Performance

As previously mentioned, Tianjin LVYIN Landscape and Ecology Construction's large boost from unusual items won't be there indefinitely, so its statutory earnings are probably a poor guide to its underlying profitability. For this reason, we think that Tianjin LVYIN Landscape and Ecology Construction's statutory profits may be a bad guide to its underlying earnings power, and might give investors an overly positive impression of the company. Sadly, its EPS was down over the last twelve months. 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. In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. Case in point: We've spotted 1 warning sign for Tianjin LVYIN Landscape and Ecology Construction you should be aware of.

Today we've zoomed in on a single data point to better understand the nature of Tianjin LVYIN Landscape and Ecology Construction'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. 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.