Some May Be Optimistic About RIDE ON EXPRESS HOLDINGS' (TSE:6082) Earnings

Soft earnings didn't appear to concern RIDE ON EXPRESS HOLDINGS Co., Ltd.'s (TSE:6082) shareholders over the last week. We did some digging, and we believe the earnings are stronger than they seem.

See our latest analysis for RIDE ON EXPRESS HOLDINGS

How Do Unusual Items Influence Profit?

For anyone who wants to understand RIDE ON EXPRESS HOLDINGS' profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by JP¥331m due to unusual items. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. 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. RIDE ON EXPRESS HOLDINGS took a rather significant hit from unusual items in the year to September 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 RIDE ON EXPRESS HOLDINGS' Profit Performance

As we mentioned previously, the RIDE ON EXPRESS HOLDINGS' profit was hampered by unusual items in the last year. Based on this observation, we consider it possible that RIDE ON EXPRESS HOLDINGS' statutory profit actually understates its earnings potential! 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. So while earnings quality is important, it's equally important to consider the risks facing RIDE ON EXPRESS HOLDINGS at this point in time. For example, we've discovered 3 warning signs that you should run your eye over to get a better picture of RIDE ON EXPRESS HOLDINGS.

This note has only looked at a single factor that sheds light on the nature of RIDE ON EXPRESS HOLDINGS' profit. But there is always more to discover if you are capable of focussing your mind on minutiae. 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.