There May Be Some Bright Spots In Leshan Electric PowerLtd's (SHSE:600644) Earnings

The market for Leshan Electric Power Co.,Ltd's (SHSE:600644) shares didn't move much after it posted weak earnings recently. Our analysis suggests that while the profits are soft, the foundations of the business are strong.

Check out our latest analysis for Leshan Electric PowerLtd

The Impact Of Unusual Items On Profit

For anyone who wants to understand Leshan Electric PowerLtd's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by CN¥8.4m due 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. If Leshan Electric PowerLtd 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 Leshan Electric PowerLtd.

Our Take On Leshan Electric PowerLtd's Profit Performance

Because unusual items detracted from Leshan Electric PowerLtd's earnings over the last year, you could argue that we can expect an improved result in the current quarter. Because of this, we think Leshan Electric PowerLtd'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 want to do dive deeper into Leshan Electric PowerLtd, you'd also look into what risks it is currently facing. For example - Leshan Electric PowerLtd has 1 warning sign we think you should be aware of.

Today we've zoomed in on a single data point to better understand the nature of Leshan Electric PowerLtd'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. 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.