Soft earnings didn't appear to concern Inner Mongolia ERDOS Resources Co.,Ltd.'s (SHSE:600295) shareholders over the last week. We did some digging, and we believe the earnings are stronger than they seem.

The Impact Of Unusual Items On Profit

To properly understand Inner Mongolia ERDOS ResourcesLtd's profit results, we need to consider the CN¥1.2b expense attributed to unusual items. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And, after all, that's exactly what the accounting terminology implies. In the twelve months to September 2024, Inner Mongolia ERDOS ResourcesLtd had a big unusual items expense. 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 Inner Mongolia ERDOS ResourcesLtd's Profit Performance

As we mentioned previously, the Inner Mongolia ERDOS ResourcesLtd's profit was hampered by unusual items in the last year. Because of this, we think Inner Mongolia ERDOS ResourcesLtd's underlying earnings potential is as good as, or possibly even better, than the statutory profit makes it seem! On the other hand, its EPS actually shrunk in the last twelve months. 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. If you want to do dive deeper into Inner Mongolia ERDOS ResourcesLtd, you'd also look into what risks it is currently facing. At Simply Wall St, we found 2 warning signs for Inner Mongolia ERDOS ResourcesLtd and we think they deserve your attention.

Today we've zoomed in on a single data point to better understand the nature of Inner Mongolia ERDOS ResourcesLtd'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.