When companies post strong earnings, the stock generally performs well, just like AngloGold Ashanti plc's (NYSE:AU) stock has recently. We have done some analysis, and we found several positive factors beyond the profit numbers.

The Impact Of Unusual Items On Profit

To properly understand AngloGold Ashanti's profit results, we need to consider the US$429m expense attributed to unusual items. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And that's hardly a surprise given these line items are considered unusual. AngloGold Ashanti took a rather significant hit from unusual items in the year to June 2024. As a result, we can surmise that the unusual items made its statutory profit significantly weaker than it would otherwise be.

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 AngloGold Ashanti's Profit Performance

As we discussed above, we think the significant unusual expense will make AngloGold Ashanti's statutory profit lower than it would otherwise have been. Based on this observation, we consider it possible that AngloGold Ashanti's statutory profit actually understates its earnings potential! And it's also positive that the company showed enough improvement to book a profit this year, after losing money last year. 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 AngloGold Ashanti, you'd also look into what risks it is currently facing. You'd be interested to know, that we found 1 warning sign for AngloGold Ashanti and you'll want to know about it.

This note has only looked at a single factor that sheds light on the nature of AngloGold Ashanti'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. 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.