Hokuriku Electric Power (TSE:9505) Is Posting Promising Earnings But The Good News Doesn’t Stop There

Investors signalled that they were pleased with Hokuriku Electric Power Company's (TSE:9505) most recent earnings report. Looking deeper at the numbers, we found several encouraging factors beyond the headline profit numbers.

See our latest analysis for Hokuriku Electric Power

The Impact Of Unusual Items On Profit

For anyone who wants to understand Hokuriku Electric Power's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by JP¥46b due to unusual items. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And that's hardly a surprise given these line items are considered unusual. Hokuriku Electric Power took a rather significant hit from unusual items in the year to March 2024. All else being equal, this would likely have the effect of making the statutory profit look worse than its underlying earnings power.

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 Hokuriku Electric Power's Profit Performance

As we discussed above, we think the significant unusual expense will make Hokuriku Electric Power's statutory profit lower than it would otherwise have been. Based on this observation, we consider it possible that Hokuriku Electric Power's statutory profit actually understates its earnings potential! And it's also positive that the company showed enough improvement to book a profit this year, after losing money last year. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. To help with this, we've discovered 3 warning signs (1 is concerning!) that you ought to be aware of before buying any shares in Hokuriku Electric Power.

Today we've zoomed in on a single data point to better understand the nature of Hokuriku Electric Power'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 that insiders are buying 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.