Fiberhome Telecommunication Technologies Co., Ltd.'s (SHSE:600498) recent earnings report didn't offer any surprises, with the shares unchanged over the last week. 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

For anyone who wants to understand Fiberhome Telecommunication Technologies' profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by CN¥151m due 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. 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. If Fiberhome Telecommunication Technologies 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 Fiberhome Telecommunication Technologies' Profit Performance

Unusual items (expenses) detracted from Fiberhome Telecommunication Technologies' earnings over the last year, but we might see an improvement next year. Because of this, we think Fiberhome Telecommunication Technologies' earnings potential is at least as good as it seems, and maybe even better! And on top of that, its earnings per share have grown at 42% per year 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. In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. For example - Fiberhome Telecommunication Technologies has 1 warning sign we think you should be aware of.

This note has only looked at a single factor that sheds light on the nature of Fiberhome Telecommunication Technologies' profit. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. 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 that insiders are buying to be useful.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.