Concerns Surrounding AMOREPACIFIC Group's (KRX:002790) Performance

The recent earnings posted by AMOREPACIFIC Group (KRX:002790) were solid, but the stock didn't move as much as we expected. We believe that shareholders have noticed some concerning factors beyond the statutory profit numbers.

Check out our latest analysis for AMOREPACIFIC Group

How Do Unusual Items Influence Profit?

Importantly, our data indicates that AMOREPACIFIC Group's profit received a boost of ₩182b in unusual items, over the last year. While we like to see profit increases, we tend to be a little more cautious when unusual items have made a big contribution. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. Which is hardly surprising, given the name. We can see that AMOREPACIFIC Group's positive unusual items were quite significant relative to its profit in the year to September 2024. As a result, we can surmise that the unusual items are making its statutory profit significantly stronger than it would otherwise be.

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 AMOREPACIFIC Group's Profit Performance

As we discussed above, we think the significant positive unusual item makes AMOREPACIFIC Group's earnings a poor guide to its underlying profitability. As a result, we think it may well be the case that AMOREPACIFIC Group's underlying earnings power is lower than its statutory profit. But the happy news is that, while acknowledging we have to look beyond the statutory numbers, those numbers are still improving, with EPS growing at a very high rate over the last year. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. If you want to do dive deeper into AMOREPACIFIC Group, you'd also look into what risks it is currently facing. At Simply Wall St, we found 1 warning sign for AMOREPACIFIC Group and we think they deserve your attention.

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