Statutory Profit Doesn't Reflect How Good Qatar Navigation Q.P.S.C's (DSM:QNNS) Earnings Are

Even though Qatar Navigation Q.P.S.C.'s (DSM:QNNS) 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.

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How Do Unusual Items Influence Profit?

To properly understand Qatar Navigation Q.P.S.C's profit results, we need to consider the ر.ق116m expense attributed 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. If Qatar Navigation Q.P.S.C doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Qatar Navigation Q.P.S.C.

Our Take On Qatar Navigation Q.P.S.C's Profit Performance

Because unusual items detracted from Qatar Navigation Q.P.S.C's earnings over the last year, you could argue that we can expect an improved result in the current quarter. Because of this, we think Qatar Navigation Q.P.S.C's earnings potential is at least as good as it seems, and maybe even better! And the EPS is up 26% annually, over the last three years. 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. While earnings are important, another area to consider is the balance sheet. We've done some analysis and you can see our take on Qatar Navigation Q.P.S.C's balance sheet by clicking here.

This note has only looked at a single factor that sheds light on the nature of Qatar Navigation Q.P.S.C's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. 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.