ENN Natural Gas Co.,Ltd. (SHSE:600803) just reported healthy earnings but the stock price didn't move much. Our analysis suggests that investors might be missing some promising details.

The Impact Of Unusual Items On Profit

For anyone who wants to understand ENN Natural GasLtd's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by CN¥2.3b due to unusual items. 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. If ENN Natural GasLtd doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

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. Because of this, we think ENN Natural GasLtd's earnings potential is at least as good as it seems, and maybe even better! And the EPS is up 58% annually, 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. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's 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 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 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.