Shareholders Will Be Pleased With The Quality of Wuhan Sante Cableway Group's (SZSE:002159) Earnings

Wuhan Sante Cableway Group Co., Ltd. (SZSE:002159) recently posted some strong earnings, and the market responded positively. We have done some analysis, and we found several positive factors beyond the profit numbers.

See our latest analysis for Wuhan Sante Cableway Group

How Do Unusual Items Influence Profit?

Importantly, our data indicates that Wuhan Sante Cableway Group's profit was reduced by CN¥54m, 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. Assuming those unusual expenses don't come up again, we'd therefore expect Wuhan Sante Cableway Group to produce a higher profit next year, all else being equal.

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 Wuhan Sante Cableway Group's Profit Performance

Unusual items (expenses) detracted from Wuhan Sante Cableway Group's earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that Wuhan Sante Cableway Group's statutory profit actually understates its earnings potential! Furthermore, it has done a great job growing EPS over 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. If you'd like to know more about Wuhan Sante Cableway Group as a business, it's important to be aware of any risks it's facing. For example - Wuhan Sante Cableway Group has 1 warning sign we think you should be aware of.

Today we've zoomed in on a single data point to better understand the nature of Wuhan Sante Cableway Group'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. 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.

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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.