YASKAWA Electric's (TSE:6506) Shareholders May Want To Dig Deeper Than Statutory Profit

Following the solid earnings report from YASKAWA Electric Corporation (TSE:6506), the market responded by bidding up the stock price. However, we think that shareholders should be cautious as we found some worrying factors underlying the profit.

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The Impact Of Unusual Items On Profit

For anyone who wants to understand YASKAWA Electric's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from JP¥27b worth of unusual items. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. When we crunched the numbers on thousands of publicly listed companies, we found that a boost from unusual items in a given year is often not repeated the next year. Which is hardly surprising, given the name. We can see that YASKAWA Electric's positive unusual items were quite significant relative to its profit in the year to August 2025. 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 YASKAWA Electric's Profit Performance

As previously mentioned, YASKAWA Electric's large boost from unusual items won't be there indefinitely, so its statutory earnings are probably a poor guide to its underlying profitability. As a result, we think it may well be the case that YASKAWA Electric's underlying earnings power is lower than its statutory profit. Nonetheless, it's still worth noting that its earnings per share have grown at 41% 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. If you want to do dive deeper into YASKAWA Electric, you'd also look into what risks it is currently facing. For instance, we've identified 3 warning signs for YASKAWA Electric (2 are concerning) you should be familiar with.

This note has only looked at a single factor that sheds light on the nature of YASKAWA Electric'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 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.