Jiangsu Provincial Agricultural Reclamation and DevelopmentLtd's (SHSE:601952) Shareholders Have More To Worry About Than Only Soft Earnings

Investors were disappointed by Jiangsu Provincial Agricultural Reclamation and Development Co.,Ltd.'s (SHSE:601952 ) latest earnings release. Our analysis has found some reasons to be concerned, beyond the weak headline numbers.

Check out our latest analysis for Jiangsu Provincial Agricultural Reclamation and DevelopmentLtd

How Do Unusual Items Influence Profit?

To properly understand Jiangsu Provincial Agricultural Reclamation and DevelopmentLtd's profit results, we need to consider the CN¥82m gain attributed to unusual items. We can't deny that higher profits generally leave us optimistic, but we'd prefer it if the profit were to be sustainable. 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. Which is hardly surprising, given the name. 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 Jiangsu Provincial Agricultural Reclamation and DevelopmentLtd's Profit Performance

We'd posit that Jiangsu Provincial Agricultural Reclamation and DevelopmentLtd's statutory earnings aren't a clean read on ongoing productivity, due to the large unusual item. Because of this, we think that it may be that Jiangsu Provincial Agricultural Reclamation and DevelopmentLtd's statutory profits are better than its underlying earnings power. 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. If you'd like to know more about Jiangsu Provincial Agricultural Reclamation and DevelopmentLtd as a business, it's important to be aware of any risks it's facing. You'd be interested to know, that we found 1 warning sign for Jiangsu Provincial Agricultural Reclamation and DevelopmentLtd and you'll want to know about this.

Today we've zoomed in on a single data point to better understand the nature of Jiangsu Provincial Agricultural Reclamation and DevelopmentLtd's profit. But there are plenty of other ways to inform your opinion of a company. 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. 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.