Shareholders appeared to be happy with Lotte Wellfood Co.,Ltd's (KRX:280360) solid earnings report last week. Looking deeper at the numbers, we found several encouraging factors beyond the headline profit numbers.
View our latest analysis for Lotte WellfoodLtd
How Do Unusual Items Influence Profit?
To properly understand Lotte WellfoodLtd's profit results, we need to consider the ₩38b 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. Assuming those unusual expenses don't come up again, we'd therefore expect Lotte WellfoodLtd to produce a higher profit next year, all else being equal.
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 Lotte WellfoodLtd's Profit Performance
Because unusual items detracted from Lotte WellfoodLtd's earnings over the last year, you could argue that we can expect an improved result in the current quarter. Because of this, we think Lotte WellfoodLtd's earnings potential is at least as good as it seems, and maybe even better! And the EPS is up 22% annually, over the last three years. 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 Lotte WellfoodLtd as a business, it's important to be aware of any risks it's facing. While conducting our analysis, we found that Lotte WellfoodLtd has 2 warning signs and it would be unwise to ignore these.
Today we've zoomed in on a single data point to better understand the nature of Lotte WellfoodLtd's profit. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. 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.
About KOSE:A280360
Lotte WellfoodLtd
Manufactures and sells various confectionery products in South Korea and internationally.
Flawless balance sheet and undervalued.
