Soft earnings didn't appear to concern Guangzhou Anyka Microelectronics Co., Ltd.'s (SHSE:688620) shareholders over the last week. We think that the softer headline numbers might be getting counterbalanced by some positive underlying factors.

The Impact Of Unusual Items On Profit

For anyone who wants to understand Guangzhou Anyka Microelectronics' profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by CN¥2.3m 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, after all, that's exactly what the accounting terminology implies. If Guangzhou Anyka Microelectronics 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 Guangzhou Anyka Microelectronics' Profit Performance

Unusual items (expenses) detracted from Guangzhou Anyka Microelectronics' earnings over the last year, but we might see an improvement next year. Because of this, we think Guangzhou Anyka Microelectronics' earnings potential is at least as good as it seems, and maybe even better! On the other hand, its EPS actually shrunk in the last twelve months. 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. So while earnings quality is important, it's equally important to consider the risks facing Guangzhou Anyka Microelectronics at this point in time. You'd be interested to know, that we found 2 warning signs for Guangzhou Anyka Microelectronics and you'll want to know about these.

This note has only looked at a single factor that sheds light on the nature of Guangzhou Anyka Microelectronics' 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.

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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.