CNTEE Transelectrica's (BVB:TEL) Solid Earnings Have Been Accounted For Conservatively

The market seemed underwhelmed by last week's earnings announcement from CNTEE Transelectrica SA (BVB:TEL) despite the healthy numbers. We did some digging, and we think that investors are missing some encouraging factors in the underlying numbers.

View our latest analysis for CNTEE Transelectrica

The Impact Of Unusual Items On Profit

For anyone who wants to understand CNTEE Transelectrica's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by RON28m due 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, after all, that's exactly what the accounting terminology implies. Assuming those unusual expenses don't come up again, we'd therefore expect CNTEE Transelectrica 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 CNTEE Transelectrica's Profit Performance

Unusual items (expenses) detracted from CNTEE Transelectrica's earnings over the last year, but we might see an improvement next year. Because of this, we think CNTEE Transelectrica'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 an extremely impressive rate over the last three years. 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 CNTEE Transelectrica as a business, it's important to be aware of any risks it's facing. For example - CNTEE Transelectrica has 1 warning sign we think you should be aware of.

Today we've zoomed in on a single data point to better understand the nature of CNTEE Transelectrica'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 that insiders are buying.

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