Some May Be Optimistic About Wihlborgs Fastigheter's (STO:WIHL) Earnings

Soft earnings didn't appear to concern Wihlborgs Fastigheter AB (publ)'s (STO:WIHL) shareholders over the last week. We think that the softer headline numbers might be getting counterbalanced by some positive underlying factors.

See our latest analysis for Wihlborgs Fastigheter

The Impact Of Unusual Items On Profit

Importantly, our data indicates that Wihlborgs Fastigheter's profit was reduced by kr1.2b, due to unusual items, over the last year. 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. In the twelve months to March 2024, Wihlborgs Fastigheter had a big unusual items expense. All else being equal, this would likely have the effect of making the statutory profit look worse than its underlying earnings power.

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 Wihlborgs Fastigheter's Profit Performance

As we mentioned previously, the Wihlborgs Fastigheter's profit was hampered by unusual items in the last year. Based on this observation, we consider it possible that Wihlborgs Fastigheter's statutory profit actually understates its earnings potential! On the other hand, its EPS actually shrunk in the last twelve months. 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. With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. To help with this, we've discovered 4 warning signs (1 is significant!) that you ought to be aware of before buying any shares in Wihlborgs Fastigheter.

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