Earnings Troubles May Signal Larger Issues for KCC GLASS (KRX:344820) Shareholders

KCC GLASS Corporation's (KRX:344820) recent weak earnings report didn't cause a big stock movement. Our analysis suggests that along with soft profit numbers, investors should be aware of some other underlying weaknesses in the numbers.

See our latest analysis for KCC GLASS

The Impact Of Unusual Items On Profit

For anyone who wants to understand KCC GLASS' profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from ₩8.4b 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 analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And that's as you'd expect, given these boosts are described as 'unusual'. 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 KCC GLASS.

Our Take On KCC GLASS' Profit Performance

We'd posit that KCC GLASS' statutory earnings aren't a clean read on ongoing productivity, due to the large unusual item. Because of this, we think that it may be that KCC GLASS' statutory profits are better than its underlying earnings power. In further bad news, its earnings per share decreased in the last year. 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'd like to know more about KCC GLASS as a business, it's important to be aware of any risks it's facing. While conducting our analysis, we found that KCC GLASS has 1 warning sign and it would be unwise to ignore this.

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

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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.