We Like The Quality Of PN Poong Nyun's (KOSDAQ:024940) Earnings

PN Poong Nyun Co., Ltd.'s (KOSDAQ:024940) recent earnings report didn't offer any surprises, with the shares unchanged over the last week. We did some analysis to find out why and believe that investors might be missing some encouraging factors contained in the earnings.

Check out our latest analysis for PN Poong Nyun

How Do Unusual Items Influence Profit?

For anyone who wants to understand PN Poong Nyun's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by ₩242m due to unusual items. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And, after all, that's exactly what the accounting terminology implies. If PN Poong Nyun doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of PN Poong Nyun.

Our Take On PN Poong Nyun's Profit Performance

Unusual items (expenses) detracted from PN Poong Nyun's earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that PN Poong Nyun's statutory profit actually understates its earnings potential! And on top of that, its earnings per share increased by 27% 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. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. For instance, we've identified 3 warning signs for PN Poong Nyun (1 is a bit concerning) you should be familiar with.

This note has only looked at a single factor that sheds light on the nature of PN Poong Nyun'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 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.