NOROO PAINT & COATINGS' (KRX:090350) Performance Is Even Better Than Its Earnings Suggest

NOROO PAINT & COATINGS Co., Ltd. (KRX:090350) just reported healthy earnings but the stock price didn't move much. We think that investors have missed some encouraging factors underlying the profit figures.

See our latest analysis for NOROO PAINT & COATINGS

The Impact Of Unusual Items On Profit

For anyone who wants to understand NOROO PAINT & COATINGS' profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by ₩6.0b 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 NOROO PAINT & COATINGS 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 NOROO PAINT & COATINGS.

Our Take On NOROO PAINT & COATINGS' Profit Performance

Unusual items (expenses) detracted from NOROO PAINT & COATINGS' earnings over the last year, but we might see an improvement next year. Because of this, we think NOROO PAINT & COATINGS' earnings potential is at least as good as it seems, and maybe even better! Furthermore, it has done a great job growing EPS 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'd like to know more about NOROO PAINT & COATINGS as a business, it's important to be aware of any risks it's facing. At Simply Wall St, we found 2 warning signs for NOROO PAINT & COATINGS and we think they deserve your attention.

This note has only looked at a single factor that sheds light on the nature of NOROO PAINT & COATINGS' 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 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.