Kukdong Oil & ChemicalsLtd's (KRX:014530) Soft Earnings Don't Show The Whole Picture

Soft earnings didn't appear to concern Kukdong Oil & Chemicals Co.,Ltd's (KRX:014530) shareholders over the last week. We did some digging, and we believe the earnings are stronger than they seem.

View our latest analysis for Kukdong Oil & ChemicalsLtd

How Do Unusual Items Influence Profit?

Importantly, our data indicates that Kukdong Oil & ChemicalsLtd's profit was reduced by ₩3.0b, due to unusual items, over the last year. 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, after all, that's exactly what the accounting terminology implies. If Kukdong Oil & ChemicalsLtd 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 Kukdong Oil & ChemicalsLtd.

Our Take On Kukdong Oil & ChemicalsLtd's Profit Performance

Unusual items (expenses) detracted from Kukdong Oil & ChemicalsLtd's earnings over the last year, but we might see an improvement next year. Because of this, we think Kukdong Oil & ChemicalsLtd's earnings potential is at least as good as it seems, and maybe even better! Better yet, its EPS are growing strongly, which is nice to see. 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'd like to know more about Kukdong Oil & ChemicalsLtd as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 3 warning signs for Kukdong Oil & ChemicalsLtd you should be mindful of and 1 of them makes us a bit uncomfortable.

This note has only looked at a single factor that sheds light on the nature of Kukdong Oil & ChemicalsLtd'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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.