We Think Revvity's (NYSE:RVTY) Healthy Earnings Might Be Conservative

Revvity, Inc.'s (NYSE:RVTY) solid earnings announcement recently didn't do much to the stock price. We did some digging, and we think that investors are missing some encouraging factors in the underlying numbers.

Check out our latest analysis for Revvity

The Impact Of Unusual Items On Profit

Importantly, our data indicates that Revvity's profit was reduced by US$106m, 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. If Revvity 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 Revvity's Profit Performance

Unusual items (expenses) detracted from Revvity's earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that Revvity's statutory profit actually understates its earnings potential! And the EPS is up 23% over the last twelve months. 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. So while earnings quality is important, it's equally important to consider the risks facing Revvity at this point in time. Every company has risks, and we've spotted 1 warning sign for Revvity you should know about.

This note has only looked at a single factor that sheds light on the nature of Revvity's 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.