Bristow Group Inc.'s (NYSE:VTOL) recent earnings report didn't offer any surprises, with the shares unchanged over the last week. Our analysis suggests that shareholders might be missing some positive underlying factors in the earnings report.
The Impact Of Unusual Items On Profit
For anyone who wants to understand Bristow Group's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by US$88m due 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. In the twelve months to March 2021, Bristow Group had a big unusual items expense. As a result, we can surmise that the unusual items made its statutory profit significantly weaker 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 Bristow Group's Profit Performance
As we discussed above, we think the significant unusual expense will make Bristow Group's statutory profit lower than it would otherwise have been. Based on this observation, we consider it possible that Bristow Group's statutory profit actually understates its earnings potential! 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. So while earnings quality is important, it's equally important to consider the risks facing Bristow Group at this point in time. Our analysis shows 2 warning signs for Bristow Group (1 is potentially serious!) and we strongly recommend you look at them before investing.
Today we've zoomed in on a single data point to better understand the nature of Bristow Group'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. 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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