We Think That There Are Some Issues For Tokyo KisenLtd (TSE:9193) Beyond Its Promising Earnings

The market for Tokyo Kisen Co.,Ltd.'s (TSE:9193) stock was strong after it released a healthy earnings report last week. While the profit numbers were good, our analysis has found some concerning factors that shareholders should be aware of.

View our latest analysis for Tokyo KisenLtd

The Impact Of Unusual Items On Profit

For anyone who wants to understand Tokyo KisenLtd's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from JP¥671m 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. Which is hardly surprising, given the name. We can see that Tokyo KisenLtd's positive unusual items were quite significant relative to its profit in the year to September 2024. As a result, we can surmise that the unusual items are making its statutory profit significantly stronger than it would otherwise be.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Tokyo KisenLtd.

Our Take On Tokyo KisenLtd's Profit Performance

As we discussed above, we think the significant positive unusual item makes Tokyo KisenLtd's earnings a poor guide to its underlying profitability. As a result, we think it may well be the case that Tokyo KisenLtd's underlying earnings power is lower than its statutory profit. The good news is that its earnings per share increased slightly in the last year. 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. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. You'd be interested to know, that we found 3 warning signs for Tokyo KisenLtd and you'll want to know about these.

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