We Like Industrie De Nora's (BIT:DNR) Earnings For More Than Just Statutory Profit

The market seemed underwhelmed by the solid earnings posted by Industrie De Nora S.p.A. (BIT:DNR) recently. Along with the solid headline numbers, we think that investors have some reasons for optimism.

See our latest analysis for Industrie De Nora

How Do Unusual Items Influence Profit?

For anyone who wants to understand Industrie De Nora's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by €29m 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. 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. If Industrie De Nora 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 Industrie De Nora's Profit Performance

Because unusual items detracted from Industrie De Nora's earnings over the last year, you could argue that we can expect an improved result in the current quarter. Based on this observation, we consider it likely that Industrie De Nora's statutory profit actually understates its earnings potential! And on top of that, its earnings per share have grown at an extremely impressive rate over the last three years. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. Obviously, we love to consider the historical data to inform our opinion of a company. But it can be really valuable to consider what other analysts are forecasting. Luckily, you can check out what analysts are forecasting by clicking here.

Today we've zoomed in on a single data point to better understand the nature of Industrie De Nora'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. 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.