Long Time Technology (GTSM:6555) Is Posting Promising Earnings But The Good News Doesn’t Stop There

Long Time Technology Co., Ltd.'s (GTSM:6555) recent earnings report didn't offer any surprises, with the shares unchanged over the last week. We did some digging, and we think that investors are missing some encouraging factors in the underlying numbers.

See our latest analysis for Long Time Technology

How Do Unusual Items Influence Profit?

To properly understand Long Time Technology's profit results, we need to consider the NT$5.4m expense attributed 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 that's hardly a surprise given these line items are considered unusual. If Long Time Technology doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Long Time Technology.

Our Take On Long Time Technology's Profit Performance

Unusual items (expenses) detracted from Long Time Technology's earnings over the last year, but we might see an improvement next year. Because of this, we think Long Time Technology's earnings potential is at least as good as it seems, and maybe even better! And one can definitely find a positive in the fact that it made a profit this year, despite losing money last year. 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. If you'd like to know more about Long Time Technology as a business, it's important to be aware of any risks it's facing. You'd be interested to know, that we found 1 warning sign for Long Time Technology and you'll want to know about this.

This note has only looked at a single factor that sheds light on the nature of Long Time Technology's profit. But there are plenty of other ways to inform your opinion of a company. 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 that insiders are buying to be useful.

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This article by Simply Wall St is general in nature. 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.
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