The Strong Earnings Posted By Haemonetics (NYSE:HAE) Are A Good Indication Of The Strength Of The Business

Haemonetics Corporation (NYSE:HAE) just reported healthy earnings but the stock price didn't move much. Investors are probably missing some underlying factors which are encouraging for the future of the company.

See our latest analysis for Haemonetics

How Do Unusual Items Influence Profit?

For anyone who wants to understand Haemonetics' profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by US$29m due to unusual items. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And that's hardly a surprise given these line items are considered unusual. If Haemonetics doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

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 Haemonetics' Profit Performance

Because unusual items detracted from Haemonetics' earnings over the last year, you could argue that we can expect an improved result in the current quarter. Because of this, we think Haemonetics' earnings potential is at least as good as it seems, and maybe even better! And the EPS is up 18% annually, over the last three years. 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. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. Every company has risks, and we've spotted 1 warning sign for Haemonetics you should know about.

Today we've zoomed in on a single data point to better understand the nature of Haemonetics' 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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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.