There May Be Some Bright Spots In Taiyo Holdings' (TSE:4626) Earnings

Taiyo Holdings Co., Ltd.'s (TSE:4626) earnings announcement last week didn't impress shareholders. Despite the soft profit numbers, our analysis has optimistic about the overall quality of the income statement.

Check out our latest analysis for Taiyo Holdings

How Do Unusual Items Influence Profit?

Importantly, our data indicates that Taiyo Holdings' profit was reduced by JP¥5.2b, 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, after all, that's exactly what the accounting terminology implies. Assuming those unusual expenses don't come up again, we'd therefore expect Taiyo Holdings 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 Taiyo Holdings' Profit Performance

Because unusual items detracted from Taiyo Holdings' earnings over the last year, you could argue that we can expect an improved result in the current quarter. Because of this, we think Taiyo Holdings' earnings potential is at least as good as it seems, and maybe even better! On the other hand, its EPS actually shrunk in the last twelve months. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. If you'd like to know more about Taiyo Holdings as a business, it's important to be aware of any risks it's facing. You'd be interested to know, that we found 2 warning signs for Taiyo Holdings and you'll want to know about them.

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