There May Be Some Bright Spots In Yangtze Optical Fibre And Cable Limited's (HKG:6869) Earnings

Yangtze Optical Fibre And Cable Joint Stock Limited Company's (HKG:6869) stock was strong despite it releasing a soft earnings report last week. We think that investors might be looking at some positive factors beyond the earnings numbers.

View our latest analysis for Yangtze Optical Fibre And Cable Limited

How Do Unusual Items Influence Profit?

Importantly, our data indicates that Yangtze Optical Fibre And Cable Limited's profit was reduced by CN¥72m, due to unusual items, over the last year. 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 Yangtze Optical Fibre And Cable Limited 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 Yangtze Optical Fibre And Cable Limited's Profit Performance

Unusual items (expenses) detracted from Yangtze Optical Fibre And Cable Limited's earnings over the last year, but we might see an improvement next year. Because of this, we think Yangtze Optical Fibre And Cable Limited's earnings potential is at least as good as it seems, and maybe even better! And the EPS is up 41% annually, over the last three years. 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. 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 example - Yangtze Optical Fibre And Cable Limited has 1 warning sign we think you should be aware of.

This note has only looked at a single factor that sheds light on the nature of Yangtze Optical Fibre And Cable Limited'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 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.