Amneal Pharmaceuticals' (NASDAQ:AMRX) Earnings May Just Be The Starting Point

Amneal Pharmaceuticals, Inc. (NASDAQ:AMRX) recently posted some strong earnings, and the market responded positively. We did some digging and found some further encouraging factors that investors will like.

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The Impact Of Unusual Items On Profit

Importantly, our data indicates that Amneal Pharmaceuticals' profit was reduced by US$49m, due to unusual items, over the last year. 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, after all, that's exactly what the accounting terminology implies. If Amneal Pharmaceuticals 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 Amneal Pharmaceuticals' Profit Performance

Unusual items (expenses) detracted from Amneal Pharmaceuticals' earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that Amneal Pharmaceuticals' statutory profit actually understates its earnings potential! And one can definitely find a positive in the fact that it made a profit this year, despite losing money last year. 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 Amneal Pharmaceuticals as a business, it's important to be aware of any risks it's facing. To help with this, we've discovered 4 warning signs (2 are significant!) that you ought to be aware of before buying any shares in Amneal Pharmaceuticals.

This note has only looked at a single factor that sheds light on the nature of Amneal Pharmaceuticals' profit. But there are plenty of other ways to inform your opinion of a company. 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. 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.