Solid Earnings Reflect Iljin DiamondLtd's (KRX:081000) Strength As A Business

Even though Iljin Diamond Co.,Ltd's (KRX:081000) recent earnings release was robust, the market didn't seem to notice. Investors are probably missing some underlying factors which are encouraging for the future of the company.

Our free stock report includes 1 warning sign investors should be aware of before investing in Iljin DiamondLtd. Read for free now.

How Do Unusual Items Influence Profit?

For anyone who wants to understand Iljin DiamondLtd's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by ₩2.0b 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. Assuming those unusual expenses don't come up again, we'd therefore expect Iljin DiamondLtd 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 Iljin DiamondLtd.

Our Take On Iljin DiamondLtd's Profit Performance

Unusual items (expenses) detracted from Iljin DiamondLtd's earnings over the last year, but we might see an improvement next year. Because of this, we think Iljin DiamondLtd's earnings potential is at least as good as it seems, and maybe even better! And on top of that, its earnings per share increased by 22% in 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. In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. For example - Iljin DiamondLtd has 1 warning sign we think you should be aware of.

Today we've zoomed in on a single data point to better understand the nature of Iljin DiamondLtd's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. 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.