We Think Oil-Dri Corporation of America's (NYSE:ODC) Robust Earnings Are Conservative

When companies post strong earnings, the stock generally performs well, just like Oil-Dri Corporation of America's (NYSE:ODC) stock has recently. We did some digging and found some further encouraging factors that investors will like.

View our latest analysis for Oil-Dri Corporation of America

How Do Unusual Items Influence Profit?

Importantly, our data indicates that Oil-Dri Corporation of America's profit was reduced by US$5.6m, due to unusual items, over the last year. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. 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 Oil-Dri Corporation of America 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 Oil-Dri Corporation of America.

Our Take On Oil-Dri Corporation of America's Profit Performance

Because unusual items detracted from Oil-Dri Corporation of America's earnings over the last year, you could argue that we can expect an improved result in the current quarter. Because of this, we think Oil-Dri Corporation of America's earnings potential is at least as good as it seems, and maybe even better! And on top of that, its earnings per share have grown at an extremely impressive rate over the last three years. 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 want to do dive deeper into Oil-Dri Corporation of America, you'd also look into what risks it is currently facing. You'd be interested to know, that we found 1 warning sign for Oil-Dri Corporation of America and you'll want to know about it.

Today we've zoomed in on a single data point to better understand the nature of Oil-Dri Corporation of America's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. 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. 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.