Stock Analysis

Shareholders Can Be Confident That Athens Water Supply and Sewerage's (ATH:EYDAP) Earnings Are High Quality

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Even though Athens Water Supply and Sewerage Company S.A.'s (ATH:EYDAP) recent earnings release was robust, the market didn't seem to notice. Our analysis suggests that investors might be missing some promising details.

See our latest analysis for Athens Water Supply and Sewerage

ATSE:EYDAP Earnings and Revenue History May 3rd 2024

The Impact Of Unusual Items On Profit

For anyone who wants to understand Athens Water Supply and Sewerage's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by €2.0m due to unusual items. 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, after all, that's exactly what the accounting terminology implies. Assuming those unusual expenses don't come up again, we'd therefore expect Athens Water Supply and Sewerage 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 Athens Water Supply and Sewerage.

Our Take On Athens Water Supply and Sewerage's Profit Performance

Unusual items (expenses) detracted from Athens Water Supply and Sewerage's earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that Athens Water Supply and Sewerage's statutory profit actually understates its earnings potential! Furthermore, it has done a great job growing EPS 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. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Case in point: We've spotted 1 warning sign for Athens Water Supply and Sewerage you should be aware of.

Today we've zoomed in on a single data point to better understand the nature of Athens Water Supply and Sewerage's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. 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.

Valuation is complex, but we're helping make it simple.

Find out whether Athens Water Supply and Sewerage 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.