We Like Eastern Province Cement's (TADAWUL:3080) Earnings For More Than Just Statutory Profit

Eastern Province Cement Company's (TADAWUL:3080) recent earnings report didn't offer any surprises, with the shares unchanged over the last week. We did some analysis to find out why and believe that investors might be missing some encouraging factors contained in the earnings.

We've discovered 1 warning sign about Eastern Province Cement. View them for free.

The Impact Of Unusual Items On Profit

For anyone who wants to understand Eastern Province Cement's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by ر.س41m due to unusual items. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. 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. If Eastern Province Cement doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

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 Eastern Province Cement's Profit Performance

Unusual items (expenses) detracted from Eastern Province Cement's earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that Eastern Province Cement's statutory profit actually understates its earnings potential! And on top of that, its earnings per share have grown at 45% per year 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. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Case in point: We've spotted 1 warning sign for Eastern Province Cement you should be aware of.

Today we've zoomed in on a single data point to better understand the nature of Eastern Province Cement's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. 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. 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.