The market seemed underwhelmed by last week's earnings announcement from ENN Natural Gas Co.,Ltd. (SHSE:600803) despite the healthy numbers. We did some digging, and we think that investors are missing some encouraging factors in the underlying numbers.

The Impact Of Unusual Items On Profit

Importantly, our data indicates that ENN Natural GasLtd's profit was reduced by CN¥3.0b, due to unusual items, over the last year. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And that's hardly a surprise given these line items are considered unusual. Assuming those unusual expenses don't come up again, we'd therefore expect ENN Natural GasLtd to produce a higher profit next year, all else being equal.

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 ENN Natural GasLtd's Profit Performance

Unusual items (expenses) detracted from ENN Natural GasLtd's earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that ENN Natural GasLtd's statutory profit actually understates its earnings potential! And on top of that, its earnings per share have grown at an extremely impressive rate over the last three years. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. If you want to do dive deeper into ENN Natural GasLtd, you'd also look into what risks it is currently facing. At Simply Wall St, we found 1 warning sign for ENN Natural GasLtd and we think they deserve your attention.

This note has only looked at a single factor that sheds light on the nature of ENN Natural GasLtd's profit. But there are plenty of other ways to inform your opinion of a company. 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.