Caxton and CTP Publishers and Printers' (JSE:CAT) Anemic Earnings Might Be Worse Than You Think

Investors were disappointed by Caxton and CTP Publishers and Printers Limited's (JSE:CAT ) latest earnings release. We did some further digging and think they have a few more reasons to be concerned beyond the statutory profit.

View our latest analysis for Caxton and CTP Publishers and Printers

How Do Unusual Items Influence Profit?

For anyone who wants to understand Caxton and CTP Publishers and Printers' profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from R110m worth of unusual items. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. We ran the numbers on most publicly listed companies worldwide, and it's very common for unusual items to be once-off in nature. And, after all, that's exactly what the accounting terminology implies. Assuming those unusual items don't show up again in the current year, we'd thus expect profit to be weaker next year (in the absence of business growth, that is).

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Caxton and CTP Publishers and Printers.

Our Take On Caxton and CTP Publishers and Printers' Profit Performance

Arguably, Caxton and CTP Publishers and Printers' statutory earnings have been distorted by unusual items boosting profit. Therefore, it seems possible to us that Caxton and CTP Publishers and Printers' true underlying earnings power is actually less than its statutory profit. But at least holders can take some solace from the 23% per annum growth in EPS for the last three. 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 want to do dive deeper into Caxton and CTP Publishers and Printers, you'd also look into what risks it is currently facing. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of Caxton and CTP Publishers and Printers.

Today we've zoomed in on a single data point to better understand the nature of Caxton and CTP Publishers and Printers' 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. 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 with significant insider holdings 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.