Nippon Beet Sugar ManufacturingLtd's (TSE:2108) Shareholders May Want To Dig Deeper Than Statutory Profit

Nippon Beet Sugar Manufacturing Co.,Ltd.'s (TSE:2108 ) stock didn't jump after it announced some healthy earnings. We think that investors might be worried about some concerning underlying factors.

See our latest analysis for Nippon Beet Sugar ManufacturingLtd

The Impact Of Unusual Items On Profit

Importantly, our data indicates that Nippon Beet Sugar ManufacturingLtd's profit received a boost of JP¥8.7b in unusual items, over the last year. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. Which is hardly surprising, given the name. We can see that Nippon Beet Sugar ManufacturingLtd's positive unusual items were quite significant relative to its profit in the year to September 2024. All else being equal, this would likely have the effect of making the statutory profit a poor guide to underlying earnings power.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Nippon Beet Sugar ManufacturingLtd.

Our Take On Nippon Beet Sugar ManufacturingLtd's Profit Performance

As we discussed above, we think the significant positive unusual item makes Nippon Beet Sugar ManufacturingLtd's earnings a poor guide to its underlying profitability. As a result, we think it may well be the case that Nippon Beet Sugar ManufacturingLtd's underlying earnings power is lower than its statutory profit. But on the bright side, its earnings per share have grown at an extremely impressive rate over the last three years. 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. In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. In terms of investment risks, we've identified 1 warning sign with Nippon Beet Sugar ManufacturingLtd, and understanding it should be part of your investment process.

Today we've zoomed in on a single data point to better understand the nature of Nippon Beet Sugar ManufacturingLtd's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. 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. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful.

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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.