Robust Earnings May Not Tell The Whole Story For Aeroporto Guglielmo Marconi di Bologna (BIT:ADB)

Investors were disappointed with Aeroporto Guglielmo Marconi di Bologna S.p.A.'s (BIT:ADB) earnings, despite the strong profit numbers. We did some digging and found some worrying underlying problems.

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How Do Unusual Items Influence Profit?

For anyone who wants to understand Aeroporto Guglielmo Marconi di Bologna's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from €21m worth of unusual items. We can't deny that higher profits generally leave us optimistic, but we'd prefer it if the profit were to be sustainable. We ran the numbers on most publicly listed companies worldwide, and it's very common for unusual items to be once-off in nature. And, after all, that's exactly what the accounting terminology implies. We can see that Aeroporto Guglielmo Marconi di Bologna's positive unusual items were quite significant relative to its profit in the year to September 2022. As a result, we can surmise that the unusual items are making its statutory profit significantly stronger than it would otherwise be.

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 Aeroporto Guglielmo Marconi di Bologna's Profit Performance

As we discussed above, we think the significant positive unusual item makes Aeroporto Guglielmo Marconi di Bologna's earnings a poor guide to its underlying profitability. As a result, we think it may well be the case that Aeroporto Guglielmo Marconi di Bologna's underlying earnings power is lower than its statutory profit. On the bright side, the company showed enough improvement to book a profit this year, after losing money 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 while earnings quality is important, it's equally important to consider the risks facing Aeroporto Guglielmo Marconi di Bologna at this point in time. Every company has risks, and we've spotted 2 warning signs for Aeroporto Guglielmo Marconi di Bologna (of which 1 is a bit concerning!) you should know about.

This note has only looked at a single factor that sheds light on the nature of Aeroporto Guglielmo Marconi di Bologna's profit. But there are plenty of other ways to inform your opinion of a company. 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.