Ichishin HoldingsLtd's (TSE:4645) Earnings Offer More Than Meets The Eye

The market seemed underwhelmed by last week's earnings announcement from Ichishin Holdings Co.,Ltd. (TSE:4645) despite the healthy numbers. We did some digging, and we think that investors are missing some encouraging factors in the underlying numbers.

View our latest analysis for Ichishin HoldingsLtd

How Do Unusual Items Influence Profit?

Importantly, our data indicates that Ichishin HoldingsLtd's profit was reduced by JP¥164m, due to unusual items, over the last year. 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 that's hardly a surprise given these line items are considered unusual. Assuming those unusual expenses don't come up again, we'd therefore expect Ichishin HoldingsLtd to produce a higher profit next year, all else being equal.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Ichishin HoldingsLtd.

Our Take On Ichishin HoldingsLtd's Profit Performance

Unusual items (expenses) detracted from Ichishin HoldingsLtd's earnings over the last year, but we might see an improvement next year. Because of this, we think Ichishin HoldingsLtd's earnings potential is at least as good as it seems, and maybe even better! 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 Ichishin HoldingsLtd as a business, it's important to be aware of any risks it's facing. When we did our research, we found 4 warning signs for Ichishin HoldingsLtd (1 shouldn't be ignored!) that we believe deserve your full attention.

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