There May Be Some Bright Spots In ABO Energy GmbH KGaA's (ETR:AB9) Earnings

Investors were disappointed with the weak earnings posted by ABO Energy GmbH & Co. KGaA (ETR:AB9 ). While the headline numbers were soft, we believe that investors might be missing some encouraging factors.

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How Do Unusual Items Influence Profit?

For anyone who wants to understand ABO Energy GmbH KGaA's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by €19m 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. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And that's hardly a surprise given these line items are considered unusual. If ABO Energy GmbH KGaA 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 ABO Energy GmbH KGaA's Profit Performance

Unusual items (expenses) detracted from ABO Energy GmbH KGaA's earnings over the last year, but we might see an improvement next year. Because of this, we think ABO Energy GmbH KGaA's earnings potential is at least as good as it seems, and maybe even better! And on top of that, its earnings per share have grown at an extremely impressive rate over the last three years. 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. If you'd like to know more about ABO Energy GmbH KGaA as a business, it's important to be aware of any risks it's facing. For example, we've found that ABO Energy GmbH KGaA has 4 warning signs (1 is a bit unpleasant!) that deserve your attention before going any further with your analysis.

Today we've zoomed in on a single data point to better understand the nature of ABO Energy GmbH KGaA'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 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.