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The subdued market reaction suggests that Wacker Neuson SE's (ETR:WAC) recent earnings didn't contain any surprises. However, we believe that investors should be aware of some underlying factors which may be of concern.
View our latest analysis for Wacker Neuson
The Impact Of Unusual Items On Profit
For anyone who wants to understand Wacker Neuson's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from €28m 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 that's as you'd expect, given these boosts are described as 'unusual'. 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).
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 Wacker Neuson's Profit Performance
Arguably, Wacker Neuson's statutory earnings have been distorted by unusual items boosting profit. Because of this, we think that it may be that Wacker Neuson's statutory profits are better than its underlying earnings power. Sadly, its EPS was down over the last twelve months. 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'd like to know more about Wacker Neuson as a business, it's important to be aware of any risks it's facing. Every company has risks, and we've spotted 3 warning signs for Wacker Neuson you should know about.
This note has only looked at a single factor that sheds light on the nature of Wacker Neuson'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.