Hrvatski Telekom d.d's (ZGSE:HT) Soft Earnings Don't Show The Whole Picture

The market for Hrvatski Telekom d.d.'s (ZGSE:HT) 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.

Check out our latest analysis for Hrvatski Telekom d.d

The Impact Of Unusual Items On Profit

To properly understand Hrvatski Telekom d.d's profit results, we need to consider the Kn118m expense attributed 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 that's hardly a surprise given these line items are considered unusual. Assuming those unusual expenses don't come up again, we'd therefore expect Hrvatski Telekom d.d to produce a higher profit next year, all else being equal.

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 Hrvatski Telekom d.d's Profit Performance

Unusual items (expenses) detracted from Hrvatski Telekom d.d's earnings over the last year, but we might see an improvement next year. Because of this, we think Hrvatski Telekom d.d's earnings potential is at least as good as it seems, and maybe even better! Unfortunately, though, its earnings per share actually fell back over the 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. So while earnings quality is important, it's equally important to consider the risks facing Hrvatski Telekom d.d at this point in time. At Simply Wall St, we found 1 warning sign for Hrvatski Telekom d.d and we think they deserve your attention.

This note has only looked at a single factor that sheds light on the nature of Hrvatski Telekom d.d'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.

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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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