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James Fisher and Sons plc's (LON:FSJ ) stock didn't jump after it announced some healthy earnings. We think that investors might be worried about some concerning underlying factors.
The Impact Of Unusual Items On Profit
For anyone who wants to understand James Fisher and Sons' profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from UK£43m worth of unusual items. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. When we crunched the numbers on thousands of publicly listed companies, we found that a boost from unusual items in a given year is often not repeated the next year. Which is hardly surprising, given the name. We can see that James Fisher and Sons' positive unusual items were quite significant relative to its profit in the year 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.
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 James Fisher and Sons' Profit Performance
As we discussed above, we think the significant positive unusual item makes James Fisher and Sons' earnings a poor guide to its underlying profitability. As a result, we think it may well be the case that James Fisher and Sons' underlying earnings power is lower than its statutory profit. The good news is that it earned a profit in the last twelve months, despite its previous loss. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. If you want to do dive deeper into James Fisher and Sons, you'd also look into what risks it is currently facing. Our analysis shows 2 warning signs for James Fisher and Sons (1 is a bit concerning!) and we strongly recommend you look at these before investing.
Today we've zoomed in on a single data point to better understand the nature of James Fisher and Sons' profit. But there is always more to discover if you are capable of focussing your mind on minutiae. 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.