Investors Shouldn't Be Too Comfortable With Tsakos Energy Navigation's (NYSE:TNP) Earnings

Despite posting some strong earnings, the market for Tsakos Energy Navigation Limited's (NYSE:TNP) stock hasn't moved much. We did some digging, and we found some concerning factors in the details.

See our latest analysis for Tsakos Energy Navigation

How Do Unusual Items Influence Profit?

To properly understand Tsakos Energy Navigation's profit results, we need to consider the US$55m gain attributed to 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'. Assuming those unusual items don't show up again in the current year, we'd thus expect profit to be weaker next year (in the absence of business growth, that is).

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 Tsakos Energy Navigation's Profit Performance

Arguably, Tsakos Energy Navigation's statutory earnings have been distorted by unusual items boosting profit. Therefore, it seems possible to us that Tsakos Energy Navigation's true underlying earnings power is actually less than its statutory profit. The good news is that, its earnings per share increased by 50% 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 Tsakos Energy Navigation as a business, it's important to be aware of any risks it's facing. You'd be interested to know, that we found 3 warning signs for Tsakos Energy Navigation and you'll want to know about these bad boys.

This note has only looked at a single factor that sheds light on the nature of Tsakos Energy Navigation'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. 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.