We Think That There Are Issues Underlying Mobile Telecommunications Company Saudi Arabia's (TADAWUL:7030) Earnings

Mobile Telecommunications Company Saudi Arabia's (TADAWUL:7030) robust earnings report didn't manage to move the market for its stock. We did some digging, and we found some concerning factors in the details.

View our latest analysis for Mobile Telecommunications Company Saudi Arabia

How Do Unusual Items Influence Profit?

For anyone who wants to understand Mobile Telecommunications Company Saudi Arabia's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from ر.س1.1b worth of unusual items. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. Which is hardly surprising, given the name. We can see that Mobile Telecommunications Company Saudi Arabia's positive unusual items were quite significant relative to its profit in the year to December 2023. As a result, we can surmise that the unusual items are making its statutory profit significantly stronger than it would otherwise be.

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 Mobile Telecommunications Company Saudi Arabia's Profit Performance

As we discussed above, we think the significant positive unusual item makes Mobile Telecommunications Company Saudi Arabia's earnings a poor guide to its underlying profitability. As a result, we think it may well be the case that Mobile Telecommunications Company Saudi Arabia's underlying earnings power is lower than its statutory profit. But on the bright side, 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. So while earnings quality is important, it's equally important to consider the risks facing Mobile Telecommunications Company Saudi Arabia at this point in time. To that end, you should learn about the 4 warning signs we've spotted with Mobile Telecommunications Company Saudi Arabia (including 2 which don't sit too well with us).

Today we've zoomed in on a single data point to better understand the nature of Mobile Telecommunications Company Saudi Arabia'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 that insiders are buying.

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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.