We Like The Quality Of Compañía de Minas BuenaventuraA's (NYSE:BVN) Earnings

The market seemed underwhelmed by last week's earnings announcement from Compañía de Minas Buenaventura S.A.A. (NYSE:BVN) despite the healthy numbers. We did some digging, and we think that investors are missing some encouraging factors in the underlying numbers.

Check out our latest analysis for Compañía de Minas BuenaventuraA

How Do Unusual Items Influence Profit?

For anyone who wants to understand Compañía de Minas BuenaventuraA's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by US$46m 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. 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. Compañía de Minas BuenaventuraA took a rather significant hit from unusual items in the year to June 2022. 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 Compañía de Minas BuenaventuraA's Profit Performance

As we discussed above, we think the significant unusual expense will make Compañía de Minas BuenaventuraA's statutory profit lower than it would otherwise have been. Because of this, we think Compañía de Minas BuenaventuraA's underlying earnings potential is as good as, or possibly even better, than the statutory profit makes it seem! Furthermore, it has done a great job growing EPS over the last year. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. So while earnings quality is important, it's equally important to consider the risks facing Compañía de Minas BuenaventuraA at this point in time. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of Compañía de Minas BuenaventuraA.

Today we've zoomed in on a single data point to better understand the nature of Compañía de Minas BuenaventuraA'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. 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.