MOBASELtd's (KOSDAQ:101330) Anemic Earnings Might Be Worse Than You Think

MOBASE Co.,Ltd.'s (KOSDAQ:101330) recent weak earnings report didn't cause a big stock movement. Our analysis suggests that along with soft profit numbers, investors should be aware of some other underlying weaknesses in the numbers.

Check out our latest analysis for MOBASELtd

The Impact Of Unusual Items On Profit

To properly understand MOBASELtd's profit results, we need to consider the ₩3.8b gain attributed to unusual items. While we like to see profit increases, we tend to be a little more cautious when unusual items have made a big contribution. We ran the numbers on most publicly listed companies worldwide, and it's very common for unusual items to be once-off in nature. And that's as you'd expect, given these boosts are described as 'unusual'. Assuming those unusual items don't show up again in the current year, we'd thus expect profit to be weaker next year (in the absence of business growth, that is).

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

Our Take On MOBASELtd's Profit Performance

Arguably, MOBASELtd's statutory earnings have been distorted by unusual items boosting profit. Therefore, it seems possible to us that MOBASELtd's true underlying earnings power is actually less than its statutory profit. Sadly, its EPS was down over the last twelve months. 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 MOBASELtd as a business, it's important to be aware of any risks it's facing. When we did our research, we found 3 warning signs for MOBASELtd (1 is significant!) that we believe deserve your full attention.

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