BIT Computer's (KOSDAQ:032850) Earnings Seem To Be Promising

BIT Computer Co., Ltd's (KOSDAQ:032850) solid earnings announcement recently didn't do much to the stock price. We did some analysis to find out why and believe that investors might be missing some encouraging factors contained in the earnings.

See our latest analysis for BIT Computer

The Impact Of Unusual Items On Profit

For anyone who wants to understand BIT Computer's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by ₩1.1b due to unusual items. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. 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 BIT Computer to produce a higher profit next year, all else being equal.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of BIT Computer.

Our Take On BIT Computer's Profit Performance

Because unusual items detracted from BIT Computer's earnings over the last year, you could argue that we can expect an improved result in the current quarter. Based on this observation, we consider it likely that BIT Computer's statutory profit actually understates its earnings potential! And the EPS is up 14% over 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 want to do dive deeper into BIT Computer, you'd also look into what risks it is currently facing. Case in point: We've spotted 2 warning signs for BIT Computer you should be aware of.

Today we've zoomed in on a single data point to better understand the nature of BIT Computer's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. 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.