The market for Sonaecom, SGPS, S.A.'s (ELI:SNC) shares didn't move much after it posted weak earnings recently. We did some digging, and we believe the earnings are stronger than they seem.
The Impact Of Unusual Items On Profit
For anyone who wants to understand Sonaecom SGPS' profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by €29m 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. Sonaecom SGPS took a rather significant hit from unusual items in the year to September 2025. As a result, we can surmise that the unusual items made its statutory profit significantly weaker than it would otherwise be.
Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Sonaecom SGPS.
Our Take On Sonaecom SGPS' Profit Performance
As we discussed above, we think the significant unusual expense will make Sonaecom SGPS' statutory profit lower than it would otherwise have been. Because of this, we think Sonaecom SGPS' underlying earnings potential is as good as, or possibly even better, than the statutory profit makes it seem! Unfortunately, though, its earnings per share actually fell back over the last year. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. 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. When we did our research, we found 4 warning signs for Sonaecom SGPS (1 is a bit concerning!) that we believe deserve your full attention.
Today we've zoomed in on a single data point to better understand the nature of Sonaecom SGPS' profit. But there are plenty of other ways to inform your opinion of a company. 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. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful.
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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.