Additional Considerations Required While Assessing SRV Yhtiöt Oyj's (HEL:SRV1V) Strong Earnings

Despite announcing strong earnings, SRV Yhtiöt Oyj's (HEL:SRV1V) stock was sluggish. Our analysis uncovered some concerning factors that we believe the market might be paying attention to.

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How Do Unusual Items Influence Profit?

Importantly, our data indicates that SRV Yhtiöt Oyj's profit received a boost of €2.7m in unusual items, over the last year. While we like to see profit increases, we tend to be a little more cautious when unusual items have made a big contribution. When we crunched the numbers on thousands of publicly listed companies, we found that a boost from unusual items in a given year is often not repeated the next year. And, after all, that's exactly what the accounting terminology implies. We can see that SRV Yhtiöt Oyj's positive unusual items were quite significant relative to its profit in the year to June 2025. All else being equal, this would likely have the effect of making the statutory profit a poor guide to underlying earnings power.

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 SRV Yhtiöt Oyj's Profit Performance

As we discussed above, we think the significant positive unusual item makes SRV Yhtiöt Oyj's earnings a poor guide to its underlying profitability. As a result, we think it may well be the case that SRV Yhtiöt Oyj's underlying earnings power is lower than its statutory profit. On the bright side, the company showed enough improvement to book a profit this year, after losing money 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. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. At Simply Wall St, we found 1 warning sign for SRV Yhtiöt Oyj and we think they deserve your attention.

Today we've zoomed in on a single data point to better understand the nature of SRV Yhtiöt Oyj'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.