There May Be Some Bright Spots In Suzhou Good-Ark Electronics' (SZSE:002079) Earnings

Suzhou Good-Ark Electronics Co., Ltd.'s (SZSE:002079) earnings announcement last week didn't impress shareholders. Despite the soft profit numbers, our analysis has optimistic about the overall quality of the income statement.

See our latest analysis for Suzhou Good-Ark Electronics

The Impact Of Unusual Items On Profit

To properly understand Suzhou Good-Ark Electronics' profit results, we need to consider the CN¥25m expense attributed to unusual items. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And that's hardly a surprise given these line items are considered unusual. Assuming those unusual expenses don't come up again, we'd therefore expect Suzhou Good-Ark Electronics to produce a higher profit next year, all else being equal.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Suzhou Good-Ark Electronics.

Our Take On Suzhou Good-Ark Electronics' Profit Performance

Because unusual items detracted from Suzhou Good-Ark Electronics' earnings over the last year, you could argue that we can expect an improved result in the current quarter. Because of this, we think Suzhou Good-Ark Electronics' earnings potential is at least as good as it seems, and maybe even better! On the other hand, its EPS actually shrunk in the last twelve months. 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. With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of Suzhou Good-Ark Electronics.

Today we've zoomed in on a single data point to better understand the nature of Suzhou Good-Ark Electronics' 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. 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.