Shareholders Will Be Pleased With The Quality of KEIWA's (TSE:4251) Earnings

When companies post strong earnings, the stock generally performs well, just like KEIWA Incorporated's (TSE:4251) stock has recently. We did some digging and found some further encouraging factors that investors will like.

Check out our latest analysis for KEIWA

The Impact Of Unusual Items On Profit

Importantly, our data indicates that KEIWA's profit was reduced by JP¥1.3b, 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 KEIWA to produce a higher profit next year, all else being equal.

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 KEIWA's Profit Performance

Unusual items (expenses) detracted from KEIWA's earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that KEIWA's statutory profit actually understates its earnings potential! And on top of that, its earnings per share increased by 41% in the last year. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. If you'd like to know more about KEIWA as a business, it's important to be aware of any risks it's facing. At Simply Wall St, we found 1 warning sign for KEIWA and we think they deserve your attention.

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