Mabuchi Motor Co., Ltd.'s (TSE:6592) recent soft profit numbers didn't appear to worry shareholders, as the stock price showed strength. We think that investors might be looking at some positive factors beyond the earnings numbers.
View our latest analysis for Mabuchi Motor
How Do Unusual Items Influence Profit?
For anyone who wants to understand Mabuchi Motor's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by JP¥8.7b 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. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And that's hardly a surprise given these line items are considered unusual. Mabuchi Motor took a rather significant hit from unusual items in the year to December 2024. All else being equal, this would likely have the effect of making the statutory profit look worse than its underlying earnings power.
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 Mabuchi Motor's Profit Performance
As we discussed above, we think the significant unusual expense will make Mabuchi Motor's statutory profit lower than it would otherwise have been. Because of this, we think Mabuchi Motor's underlying earnings potential is as good as, or possibly even better, than the statutory profit makes it seem! On the other hand, its EPS actually shrunk in the last twelve months. 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. If you'd like to know more about Mabuchi Motor as a business, it's important to be aware of any risks it's facing. For example - Mabuchi Motor has 3 warning signs we think you should be aware of.
Today we've zoomed in on a single data point to better understand the nature of Mabuchi Motor's profit. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. 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.
About TSE:6592
Mabuchi Motor
Manufactures and sells of small electric motors Japan, Europe, and North America.
Flawless balance sheet average dividend payer.
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