The market for Academy of Environmental Planning and Design, Co.,Ltd. Nanjing University's (SZSE:300864) stock was strong after it released a healthy earnings report last week. While the profit numbers were good, our analysis has found some concerning factors that shareholders should be aware of.

View our latest analysis for Academy of Environmental Planning and DesignLtd. Nanjing University

The Impact Of Unusual Items On Profit

Importantly, our data indicates that Academy of Environmental Planning and DesignLtd. Nanjing University's profit received a boost of CN¥10m in unusual items, over the last year. We can't deny that higher profits generally leave us optimistic, but we'd prefer it if the profit were to be sustainable. 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).

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Academy of Environmental Planning and DesignLtd. Nanjing University.

Our Take On Academy of Environmental Planning and DesignLtd. Nanjing University's Profit Performance

Arguably, Academy of Environmental Planning and DesignLtd. Nanjing University's statutory earnings have been distorted by unusual items boosting profit. Therefore, it seems possible to us that Academy of Environmental Planning and DesignLtd. Nanjing University's true underlying earnings power is actually less than its statutory profit. But at least holders can take some solace from the 7.6% EPS growth in the last year. 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. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. You'd be interested to know, that we found 1 warning sign for Academy of Environmental Planning and DesignLtd. Nanjing University and you'll want to know about this.

This note has only looked at a single factor that sheds light on the nature of Academy of Environmental Planning and DesignLtd. Nanjing University's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying.

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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.