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Solid profit numbers didn't seem to be enough to please CTP N.V.'s (AMS:CTPNV) shareholders. Our analysis suggests they may be concerned about some underlying details.
See our latest analysis for CTP
In order to understand the potential for per share returns, it is essential to consider how much a company is diluting shareholders. CTP expanded the number of shares on issue by 5.6% over the last year. Therefore, each share now receives a smaller portion of profit. Per share metrics like EPS help us understand how much actual shareholders are benefitting from the company's profits, while the net income level gives us a better view of the company's absolute size. You can see a chart of CTP's EPS by clicking here.
How Is Dilution Impacting CTP's Earnings Per Share (EPS)?
CTP has improved its profit over the last three years, with an annualized gain of 5.4% in that time. In contrast, earnings per share were actually down by 12% per year, in the exact same period. And in the last year the company managed to bump profit up by 17%. On the other hand, earnings per share are only up 14% in that time. Therefore, the dilution is having a noteworthy influence on shareholder returns.
Changes in the share price do tend to reflect changes in earnings per share, in the long run. So it will certainly be a positive for shareholders if CTP can grow EPS persistently. But on the other hand, we'd be far less excited to learn profit (but not EPS) was improving. For the ordinary retail shareholder, EPS is a great measure to check your hypothetical "share" of the company's profit.
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.
How Do Unusual Items Influence Profit?
Alongside that dilution, it's also important to note that CTP's profit was boosted by unusual items worth €948m in the last twelve months. We can't deny that higher profits generally leave us optimistic, but we'd prefer it if the profit were to be sustainable. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And that's as you'd expect, given these boosts are described as 'unusual'. CTP had a rather significant contribution from unusual items relative to its profit to December 2024. All else being equal, this would likely have the effect of making the statutory profit a poor guide to underlying earnings power.