Does Isramco Negev 2 Limited Partnership's (TLV:ISRA.L) Statutory Profit Adequately Reflect Its Underlying Profit?

As a general rule, we think profitable companies are less risky than companies that lose money. 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. In this article, we'll look at how useful this year's statutory profit is, when analysing Isramco Negev 2 Limited Partnership (TLV:ISRA.L).

It's good to see that over the last twelve months Isramco Negev 2 Limited Partnership made a profit of US$278.4m on revenue of US$383.7m. Below, you can see that both its revenue and its profit have fallen over the last three years.

View our latest analysis for Isramco Negev 2 Limited Partnership

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. Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Isramco Negev 2 Limited Partnership.

Our Take On Isramco Negev 2 Limited Partnership's Profit Performance

Because of this, we think that it may be that Isramco Negev 2 Limited Partnership's statutory profits are better than its underlying earnings power. So while earnings quality is important, it's equally important to consider the risks facing Isramco Negev 2 Limited Partnership at this point in time. At Simply Wall St, we found 1 warning sign for Isramco Negev 2 Limited Partnership and we think they deserve your attention.

Our examination of Isramco Negev 2 Limited Partnership has focussed on certain factors that can make its earnings look better than they are. 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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