Solid Earnings May Not Tell The Whole Story For TBS HoldingsInc (TSE:9401)

TBS Holdings,Inc.'s (TSE:9401 ) stock didn't jump after it announced some healthy earnings. We think that investors might be worried about some concerning underlying factors.

Check out our latest analysis for TBS HoldingsInc

The Impact Of Unusual Items On Profit

For anyone who wants to understand TBS HoldingsInc's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from JP¥30b worth of unusual items. While we like to see profit increases, we tend to be a little more cautious when unusual items have made a big contribution. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And, after all, that's exactly what the accounting terminology implies. TBS HoldingsInc had a rather significant contribution from unusual items relative to its profit to March 2024. As a result, we can surmise that the unusual items are making its statutory profit significantly stronger than it would otherwise be.

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 TBS HoldingsInc's Profit Performance

As we discussed above, we think the significant positive unusual item makes TBS HoldingsInc's earnings a poor guide to its underlying profitability. As a result, we think it may well be the case that TBS HoldingsInc's underlying earnings power is lower than its statutory profit. But at least holders can take some solace from the 41% per annum growth in EPS for the last three. 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. Case in point: We've spotted 1 warning sign for TBS HoldingsInc you should be aware of.

Today we've zoomed in on a single data point to better understand the nature of TBS HoldingsInc'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.