Some Investors May Be Willing To Look Past Koninklijke Vopak's (AMS:VPK) Soft Earnings

Koninklijke Vopak N.V.'s (AMS:VPK) earnings announcement last week didn't impress shareholders. However, our analysis suggests that the soft headline numbers are getting counterbalanced by some positive underlying factors.

Check out our latest analysis for Koninklijke Vopak

How Do Unusual Items Influence Profit?

Importantly, our data indicates that Koninklijke Vopak's profit was reduced by €51m, due to unusual items, over the last year. 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, after all, that's exactly what the accounting terminology implies. Assuming those unusual expenses don't come up again, we'd therefore expect Koninklijke Vopak to produce a higher profit next year, all else being equal.

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 Koninklijke Vopak's Profit Performance

Unusual items (expenses) detracted from Koninklijke Vopak's earnings over the last year, but we might see an improvement next year. Because of this, we think Koninklijke Vopak's earnings potential is at least as good as it seems, and maybe even better! Unfortunately, though, its earnings per share actually fell back over the last year. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. So while earnings quality is important, it's equally important to consider the risks facing Koninklijke Vopak at this point in time. For example - Koninklijke Vopak has 1 warning sign we think you should be aware of.

This note has only looked at a single factor that sheds light on the nature of Koninklijke Vopak'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.