Edgewell Personal Care (NYSE:EPC) Is Posting Promising Earnings But The Good News Doesn’t Stop There

Edgewell Personal Care Company's (NYSE:EPC) recent earnings report didn't offer any surprises, with the shares unchanged over the last week. We did some analysis to find out why and believe that investors might be missing some encouraging factors contained in the earnings.

Check out our latest analysis for Edgewell Personal Care

The Impact Of Unusual Items On Profit

For anyone who wants to understand Edgewell Personal Care's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by US$38m 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, after all, that's exactly what the accounting terminology implies. Assuming those unusual expenses don't come up again, we'd therefore expect Edgewell Personal Care to produce a higher profit next year, all else being equal.

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 Edgewell Personal Care's Profit Performance

Unusual items (expenses) detracted from Edgewell Personal Care's earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that Edgewell Personal Care's statutory profit actually understates its earnings potential! And on top of that, its earnings per share have grown at 38% per year 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. If you'd like to know more about Edgewell Personal Care as a business, it's important to be aware of any risks it's facing. When we did our research, we found 3 warning signs for Edgewell Personal Care (1 is a bit unpleasant!) that we believe deserve your full attention.

Today we've zoomed in on a single data point to better understand the nature of Edgewell Personal Care'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 with significant insider holdings 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.