Stock Analysis

Thessaloniki Water Supply & Sewerage Co's (ATH:EYAPS) Soft Earnings Don't Show The Whole Picture

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The market for Thessaloniki Water Supply & Sewerage Co S.A.'s (ATH:EYAPS) 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.

View our latest analysis for Thessaloniki Water Supply & Sewerage Co

ATSE:EYAPS Earnings and Revenue History October 7th 2022

How Do Unusual Items Influence Profit?

For anyone who wants to understand Thessaloniki Water Supply & Sewerage Co's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by €955k 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, after all, that's exactly what the accounting terminology implies. Assuming those unusual expenses don't come up again, we'd therefore expect Thessaloniki Water Supply & Sewerage Co to produce a higher profit next year, all else being equal.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Thessaloniki Water Supply & Sewerage Co.

Our Take On Thessaloniki Water Supply & Sewerage Co's Profit Performance

Unusual items (expenses) detracted from Thessaloniki Water Supply & Sewerage Co's earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that Thessaloniki Water Supply & Sewerage Co's statutory profit actually understates its earnings potential! Unfortunately, though, its earnings per share actually fell back over the last year. 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. In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. For instance, we've identified 3 warning signs for Thessaloniki Water Supply & Sewerage Co (2 can't be ignored) you should be familiar with.

Today we've zoomed in on a single data point to better understand the nature of Thessaloniki Water Supply & Sewerage Co'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 that insiders are buying to be useful.

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Find out whether Thessaloniki Water Supply & Sewerage Co is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.