Focus Lightings Tech's (SZSE:300708) Solid Earnings Are Supported By Other Strong Factors

Focus Lightings Tech Co., Ltd.'s (SZSE:300708) earnings announcement last week was disappointing for investors, despite the decent profit numbers. We have done some analysis and have found some comforting factors beneath the profit numbers.

View our latest analysis for Focus Lightings Tech

The Impact Of Unusual Items On Profit

Importantly, our data indicates that Focus Lightings Tech's profit was reduced by CN¥20m, 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. 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. If Focus Lightings Tech doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

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 Focus Lightings Tech's Profit Performance

Unusual items (expenses) detracted from Focus Lightings Tech's earnings over the last year, but we might see an improvement next year. Because of this, we think Focus Lightings Tech's earnings potential is at least as good as it seems, and maybe even better! And the EPS is up 43% 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 want to do dive deeper into Focus Lightings Tech, you'd also look into what risks it is currently facing. At Simply Wall St, we found 1 warning sign for Focus Lightings Tech and we think they deserve your attention.

Today we've zoomed in on a single data point to better understand the nature of Focus Lightings Tech'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. 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.