Supernus Pharmaceuticals' (NASDAQ:SUPN) Soft Earnings Are Actually Better Than They Appear

The market shrugged off the recent earnings report from Supernus Pharmaceuticals, Inc. (NASDAQ:SUPN), despite the profit numbers being soft. Our analysis suggests that investors may have noticed some promising signs beyond the statutory profit figures.

View our latest analysis for Supernus Pharmaceuticals

How Do Unusual Items Influence Profit?

For anyone who wants to understand Supernus Pharmaceuticals' profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by US$30m 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. 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 Supernus 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 Supernus Pharmaceuticals' Profit Performance

Because unusual items detracted from Supernus Pharmaceuticals' earnings over the last year, you could argue that we can expect an improved result in the current quarter. Because of this, we think Supernus Pharmaceuticals' earnings potential is at least as good as it seems, and maybe even better! Unfortunately, though, its earnings per share actually fell back over 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 want to do dive deeper into Supernus Pharmaceuticals, you'd also look into what risks it is currently facing. In terms of investment risks, we've identified 2 warning signs with Supernus Pharmaceuticals, and understanding these should be part of your investment process.

Today we've zoomed in on a single data point to better understand the nature of Supernus 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. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying to be useful.

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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.