Worthington Steel (NYSE:WS) Is Posting Promising Earnings But The Good News Doesn’t Stop There

Worthington Steel, Inc. (NYSE:WS) announced a healthy earnings result recently, and the market rewarded it with a strong uplift in the stock price. This reaction by the market reaction is understandable when looking at headline profits and we have found some further encouraging factors.

View our latest analysis for Worthington Steel

How Do Unusual Items Influence Profit?

Importantly, our data indicates that Worthington Steel's profit was reduced by US$28m, 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. 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. If Worthington Steel 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 Worthington Steel's Profit Performance

Unusual items (expenses) detracted from Worthington Steel's earnings over the last year, but we might see an improvement next year. Because of this, we think Worthington Steel's earnings potential is at least as good as it seems, and maybe even better! 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 Worthington Steel as a business, it's important to be aware of any risks it's facing. To that end, you should learn about the 2 warning signs we've spotted with Worthington Steel (including 1 which doesn't sit too well with us).

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