Thrace Plastics Holding and Commercial's (ATH:PLAT) Earnings Are Growing But Is There More To The Story?

Many investors consider it preferable to invest in profitable companies over unprofitable ones, because profitability suggests a business is sustainable. Having said that, sometimes statutory profit levels are not a good guide to ongoing profitability, because some short term one-off factor has impacted profit levels. Today we'll focus on whether this year's statutory profits are a good guide to understanding Thrace Plastics Holding and Commercial (ATH:PLAT).

It's good to see that over the last twelve months Thrace Plastics Holding and Commercial made a profit of €22.9m on revenue of €351.0m. In the chart below, you can see that its profit and revenue have both grown over the last three years.

Check out our latest analysis for Thrace Plastics Holding and Commercial

Importantly, statutory profits are not always the best tool for understanding a company's true earnings power, so it's well worth examining profits in a little more detail. This article will focus on the impact unusual items have had on Thrace Plastics Holding and Commercial's statutory earnings. 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.

How Do Unusual Items Influence Profit?

Importantly, our data indicates that Thrace Plastics Holding and Commercial's profit was reduced by €4.6m, due to unusual items, over the last year. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. 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 Thrace Plastics Holding and Commercial doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

Our Take On Thrace Plastics Holding and Commercial's Profit Performance

Unusual items (expenses) detracted from Thrace Plastics Holding and Commercial's earnings over the last year, but we might see an improvement next year. Because of this, we think Thrace Plastics Holding and Commercial's earnings potential is at least as good as it seems, and maybe even better! Better yet, its EPS are growing strongly, which is nice to see. 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 if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. For example - Thrace Plastics Holding and Commercial has 2 warning signs we think you should be aware of.

Today we've zoomed in on a single data point to better understand the nature of Thrace Plastics Holding and Commercial'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. 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 that insiders are buying to be useful.

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This article by Simply Wall St is general in nature. 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.
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