There May Be Reason For Hope In EASY HOLDINGS' (KOSDAQ:035810) Disappointing Earnings

Shareholders appeared unconcerned with EASY HOLDINGS Co., Ltd.'s (KOSDAQ:035810) lackluster earnings report last week. Our analysis suggests that while the profits are soft, the foundations of the business are strong.

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How Do Unusual Items Influence Profit?

For anyone who wants to understand EASY HOLDINGS' profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by ₩26b 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. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And that's hardly a surprise given these line items are considered unusual. If EASY HOLDINGS 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 EASY HOLDINGS.

Our Take On EASY HOLDINGS' Profit Performance

Because unusual items detracted from EASY HOLDINGS' earnings over the last year, you could argue that we can expect an improved result in the current quarter. Because of this, we think EASY HOLDINGS' earnings potential is at least as good as it seems, and maybe even better! On the other hand, its EPS actually shrunk in the last twelve months. 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. If you'd like to know more about EASY HOLDINGS as a business, it's important to be aware of any risks it's facing. To that end, you should learn about the 5 warning signs we've spotted with EASY HOLDINGS (including 1 which is significant).

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