Statutory Profit Doesn't Reflect How Good John Wiley & Sons' (NYSE:JW.A) Earnings Are

By
Simply Wall St
Published
June 16, 2021
NYSE:JW.A
Source: Shutterstock

John Wiley & Sons, Inc. (NYSE:JW.A) just reported healthy earnings but the stock price didn't move much. We think that investors have missed some encouraging factors underlying the profit figures.

See our latest analysis for John Wiley & Sons

earnings-and-revenue-history
NYSE:JW.A Earnings and Revenue History June 17th 2021

How Do Unusual Items Influence Profit?

Importantly, our data indicates that John Wiley & Sons' profit was reduced by US$33m, 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 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 John Wiley & Sons 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 John Wiley & Sons' Profit Performance

Unusual items (expenses) detracted from John Wiley & Sons' earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that John Wiley & Sons' statutory profit actually understates its earnings potential! And it's also positive that the company showed enough improvement to book a profit this year, after losing money 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 if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Case in point: We've spotted 2 warning signs for John Wiley & Sons you should be aware of.

This note has only looked at a single factor that sheds light on the nature of John Wiley & Sons' 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. 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.
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