Etihad Atheeb Telecommunication's (TADAWUL:7040) Sluggish Earnings Might Be Just The Beginning Of Its Problems

Etihad Atheeb Telecommunication Company's (TADAWUL:7040) recent weak earnings report didn't cause a big stock movement. Our analysis suggests that along with soft profit numbers, investors should be aware of some other underlying weaknesses in the numbers.

See our latest analysis for Etihad Atheeb Telecommunication

How Do Unusual Items Influence Profit?

For anyone who wants to understand Etihad Atheeb Telecommunication's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from ر.س51m worth of unusual items. We can't deny that higher profits generally leave us optimistic, but we'd prefer it if the profit were to be sustainable. We ran the numbers on most publicly listed companies worldwide, and it's very common for unusual items to be once-off in nature. And that's as you'd expect, given these boosts are described as 'unusual'. Etihad Atheeb Telecommunication had a rather significant contribution from unusual items relative to its profit to December 2024. As a result, we can surmise that the unusual items are making its statutory profit significantly stronger than it would otherwise be.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Etihad Atheeb Telecommunication.

Our Take On Etihad Atheeb Telecommunication's Profit Performance

As we discussed above, we think the significant positive unusual item makes Etihad Atheeb Telecommunication's earnings a poor guide to its underlying profitability. As a result, we think it may well be the case that Etihad Atheeb Telecommunication's underlying earnings power is lower than its statutory profit. In further bad news, its earnings per share decreased in the last year. 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. If you'd like to know more about Etihad Atheeb Telecommunication as a business, it's important to be aware of any risks it's facing. For example - Etihad Atheeb Telecommunication has 2 warning signs we think you should be aware of.

This note has only looked at a single factor that sheds light on the nature of Etihad Atheeb Telecommunication'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. 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.