There May Be Some Bright Spots In Ilshin Spinning's (KRX:003200) Earnings

Soft earnings didn't appear to concern Ilshin Spinning Co., Ltd's (KRX:003200) shareholders over the last week. We did some digging, and we believe the earnings are stronger than they seem.

See our latest analysis for Ilshin Spinning

How Do Unusual Items Influence Profit?

To properly understand Ilshin Spinning's profit results, we need to consider the ₩3.9b expense attributed 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 that's hardly a surprise given these line items are considered unusual. If Ilshin Spinning 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 Ilshin Spinning.

Our Take On Ilshin Spinning's Profit Performance

Unusual items (expenses) detracted from Ilshin Spinning's earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that Ilshin Spinning's statutory profit actually understates its earnings potential! On the other hand, its EPS actually shrunk in 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. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. While conducting our analysis, we found that Ilshin Spinning has 2 warning signs and it would be unwise to ignore them.

Today we've zoomed in on a single data point to better understand the nature of Ilshin Spinning'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.