Weak Statutory Earnings May Not Tell The Whole Story For HL D&I Halla (KRX:014790)

HL D&I Halla Corporation's (KRX:014790) recent weak earnings report didn't cause a big stock movement. However, we believe that investors should be aware of some underlying factors which may be of concern.

View our latest analysis for HL D&I Halla

The Impact Of Unusual Items On Profit

For anyone who wants to understand HL D&I Halla's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from ₩20b 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. We ran the numbers on most publicly listed companies worldwide, and it's very common for unusual items to be once-off in nature. And that's as you'd expect, given these boosts are described as 'unusual'. HL D&I Halla had a rather significant contribution from unusual items relative to its profit to December 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 HL D&I Halla's Profit Performance

As we discussed above, we think the significant positive unusual item makes HL D&I Halla's earnings a poor guide to its underlying profitability. For this reason, we think that HL D&I Halla's statutory profits may be a bad guide to its underlying earnings power, and might give investors an overly positive impression of the company. Sadly, its EPS was down over the last twelve months. 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 want to do dive deeper into HL D&I Halla, you'd also look into what risks it is currently facing. To that end, you should learn about the 3 warning signs we've spotted with HL D&I Halla (including 1 which can't be ignored).

Today we've zoomed in on a single data point to better understand the nature of HL D&I Halla'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. 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.