Woosu AMSLtd's (KOSDAQ:066590) Anemic Earnings Might Be Worse Than You Think

A lackluster earnings announcement from Woosu AMS Co.,Ltd. (KOSDAQ:066590) last week didn't sink the stock price. Our analysis suggests that along with soft profit numbers, investors should be aware of some other underlying weaknesses in the numbers.

We've discovered 4 warning signs about Woosu AMSLtd. View them for free.

The Impact Of Unusual Items On Profit

For anyone who wants to understand Woosu AMSLtd's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from ₩762m worth of unusual items. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. 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. Which is hardly surprising, given the name. Assuming those unusual items don't show up again in the current year, we'd thus expect profit to be weaker next year (in the absence of business growth, that is).

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

Our Take On Woosu AMSLtd's Profit Performance

Arguably, Woosu AMSLtd's statutory earnings have been distorted by unusual items boosting profit. Because of this, we think that it may be that Woosu AMSLtd's statutory profits are better than its underlying earnings power. In further bad news, its earnings per share decreased 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. 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 4 warning signs (1 is potentially serious!) that you ought to be aware of before buying any shares in Woosu AMSLtd.

Today we've zoomed in on a single data point to better understand the nature of Woosu AMSLtd's profit. But there are plenty of other ways to inform your opinion of a company. 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.