There May Be Some Bright Spots In Zhejiang Jiecang Linear Motion TechnologyLtd's (SHSE:603583) Earnings

The most recent earnings report from Zhejiang Jiecang Linear Motion Technology Co.,Ltd. (SHSE:603583) was disappointing for shareholders. However, our analysis suggests that the soft headline numbers are getting counterbalanced by some positive underlying factors.

Check out our latest analysis for Zhejiang Jiecang Linear Motion TechnologyLtd

How Do Unusual Items Influence Profit?

To properly understand Zhejiang Jiecang Linear Motion TechnologyLtd's profit results, we need to consider the CN¥99m expense attributed to unusual items. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. 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 Zhejiang Jiecang Linear Motion TechnologyLtd 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 Zhejiang Jiecang Linear Motion TechnologyLtd's Profit Performance

Unusual items (expenses) detracted from Zhejiang Jiecang Linear Motion TechnologyLtd's earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that Zhejiang Jiecang Linear Motion TechnologyLtd's statutory profit actually understates its earnings potential! Unfortunately, though, its earnings per share actually fell back over the last year. 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. So while earnings quality is important, it's equally important to consider the risks facing Zhejiang Jiecang Linear Motion TechnologyLtd at this point in time. For example, we've discovered 2 warning signs that you should run your eye over to get a better picture of Zhejiang Jiecang Linear Motion TechnologyLtd.

This note has only looked at a single factor that sheds light on the nature of Zhejiang Jiecang Linear Motion TechnologyLtd'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. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying.

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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.