Nippon Yusen Kabushiki Kaisha's (TSE:9101) Problems Go Beyond Weak Profit

Despite Nippon Yusen Kabushiki Kaisha's (TSE:9101) recent earnings report having lackluster headline numbers, the market responded positively. We think that shareholders might be missing some concerning factors that our analysis found.

Check out our latest analysis for Nippon Yusen Kabushiki Kaisha

The Impact Of Unusual Items On Profit

Importantly, our data indicates that Nippon Yusen Kabushiki Kaisha's profit received a boost of JP¥58b in unusual items, over the last year. 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. Which is hardly surprising, given the name. Nippon Yusen Kabushiki Kaisha 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 Nippon Yusen Kabushiki Kaisha's Profit Performance

As we discussed above, we think the significant positive unusual item makes Nippon Yusen Kabushiki Kaisha's earnings a poor guide to its underlying profitability. As a result, we think it may well be the case that Nippon Yusen Kabushiki Kaisha'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. 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 Nippon Yusen Kabushiki Kaisha as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 4 warning signs for Nippon Yusen Kabushiki Kaisha you should be mindful of and 1 of them is concerning.

This note has only looked at a single factor that sheds light on the nature of Nippon Yusen Kabushiki Kaisha'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.