Silgan Holdings' (NYSE:SLGN) Earnings Offer More Than Meets The Eye

Despite posting healthy earnings, Silgan Holdings Inc.'s (NYSE:SLGN ) stock has been quite weak. We have done some analysis, and found some encouraging factors that we believe the shareholders should consider.

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How Do Unusual Items Influence Profit?

To properly understand Silgan Holdings' profit results, we need to consider the US$79m expense attributed to unusual items. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. 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. Assuming those unusual expenses don't come up again, we'd therefore expect Silgan Holdings 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 Silgan Holdings' Profit Performance

Unusual items (expenses) detracted from Silgan Holdings' earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that Silgan Holdings' statutory profit actually understates its earnings potential! And on top of that, its earnings per share increased by 6.5% in the 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. If you'd like to know more about Silgan Holdings as a business, it's important to be aware of any risks it's facing. For example, Silgan Holdings has 3 warning signs (and 1 which is significant) we think you should know about.

Today we've zoomed in on a single data point to better understand the nature of Silgan Holdings' 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 with high insider ownership.

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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.