Tamai Steamship's (TSE:9127) Solid Earnings May Rest On Weak Foundations

Tamai Steamship Co., Ltd.'s (TSE:9127) robust recent earnings didn't do much to move the stock. We think this is due to investors looking beyond the statutory profits and being concerned with what they see.

We've discovered 3 warning signs about Tamai Steamship. View them for free.

How Do Unusual Items Influence Profit?

For anyone who wants to understand Tamai Steamship's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from JP¥2.0b worth of unusual items. We can't deny that higher profits generally leave us optimistic, but we'd prefer it if the profit were to be sustainable. When we crunched the numbers on thousands of publicly listed companies, we found that a boost from unusual items in a given year is often not repeated the next year. And that's as you'd expect, given these boosts are described as 'unusual'. Tamai Steamship had a rather significant contribution from unusual items relative to its profit to March 2025. 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 Tamai Steamship.

Our Take On Tamai Steamship's Profit Performance

As we discussed above, we think the significant positive unusual item makes Tamai Steamship's earnings a poor guide to its underlying profitability. For this reason, we think that Tamai Steamship's statutory profits may be a bad guide to its underlying earnings power, and might give investors an overly positive impression of the company. But the good news is that its EPS growth over the last three years has been very impressive. 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. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. For example - Tamai Steamship has 3 warning signs we think you should be aware of.

This note has only looked at a single factor that sheds light on the nature of Tamai Steamship'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. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership.

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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.