We Think You Can Look Beyond Chongqing road & bridgeltd's (SHSE:600106) Lackluster Earnings

Investors were disappointed with the weak earnings posted by Chongqing road & bridge co.,ltd (SHSE:600106 ). However, our analysis suggests that the soft headline numbers are getting counterbalanced by some positive underlying factors.

See our latest analysis for Chongqing road & bridgeltd

How Do Unusual Items Influence Profit?

To properly understand Chongqing road & bridgeltd's profit results, we need to consider the CN¥23m 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, after all, that's exactly what the accounting terminology implies. If Chongqing road & bridgeltd doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Chongqing road & bridgeltd.

Our Take On Chongqing road & bridgeltd's Profit Performance

Unusual items (expenses) detracted from Chongqing road & bridgeltd's earnings over the last year, but we might see an improvement next year. Because of this, we think Chongqing road & bridgeltd's earnings potential is at least as good as it seems, and maybe even better! 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. If you'd like to know more about Chongqing road & bridgeltd as a business, it's important to be aware of any risks it's facing. For example, Chongqing road & bridgeltd has 2 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

This note has only looked at a single factor that sheds light on the nature of Chongqing road & bridgeltd'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. 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.