We Like The Quality Of Qatar Navigation Q.P.S.C's (DSM:QNNS) Earnings

Qatar Navigation Q.P.S.C.'s (DSM:QNNS) solid earnings announcement recently didn't do much to the stock price. Our analysis suggests that shareholders might be missing some positive underlying factors in the earnings report.

Check out our latest analysis for Qatar Navigation Q.P.S.C

How Do Unusual Items Influence Profit?

To properly understand Qatar Navigation Q.P.S.C's profit results, we need to consider the ر.ق110m expense attributed 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, after all, that's exactly what the accounting terminology implies. Assuming those unusual expenses don't come up again, we'd therefore expect Qatar Navigation Q.P.S.C 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 Qatar Navigation Q.P.S.C.

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

Unusual items (expenses) detracted from Qatar Navigation Q.P.S.C's earnings over the last year, but we might see an improvement next year. 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 on top of that, its earnings per share have grown at 55% per year over the last three years. 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. If you'd like to know more about Qatar Navigation Q.P.S.C as a business, it's important to be aware of any risks it's facing. At Simply Wall St, we found 1 warning sign for Qatar Navigation Q.P.S.C and we think they deserve your attention.

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 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. 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.