Lander Sports Development (SZSE:000558) Is Posting Promising Earnings But The Good News Doesn’t Stop There

Investors signalled that they were pleased with Lander Sports Development Co., Ltd.'s (SZSE:000558) most recent earnings report. Looking deeper at the numbers, we found several encouraging factors beyond the headline profit numbers.

See our latest analysis for Lander Sports Development

How Do Unusual Items Influence Profit?

Importantly, our data indicates that Lander Sports Development's profit was reduced by CN¥18m, 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. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And, after all, that's exactly what the accounting terminology implies. Lander Sports Development took a rather significant hit from unusual items in the year to March 2024. As a result, we can surmise that the unusual items made its statutory profit significantly weaker than it would otherwise be.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Lander Sports Development.

Our Take On Lander Sports Development's Profit Performance

As we discussed above, we think the significant unusual expense will make Lander Sports Development's statutory profit lower than it would otherwise have been. Because of this, we think Lander Sports Development's underlying earnings potential is as good as, or possibly even better, than the statutory profit makes it seem! And one can definitely find a positive in the fact that it made a profit this year, despite losing money 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 Lander Sports Development as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 1 warning sign for Lander Sports Development you should be aware of.

Today we've zoomed in on a single data point to better understand the nature of Lander Sports Development's 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. 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.