Harbin Electric Corporation Jiamusi Electric Machine CO.,Ltd's (SZSE:000922) stock showed strength, with investors undeterred by its weak earnings report. We think that shareholders might be missing some concerning factors that our analysis found.

The Impact Of Unusual Items On Profit

For anyone who wants to understand Harbin Electric Corporation Jiamusi Electric MachineLtd's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from CN¥84m worth of unusual items. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And that's as you'd expect, given these boosts are described as 'unusual'. If Harbin Electric Corporation Jiamusi Electric MachineLtd doesn't see that contribution repeat, then all else being equal we'd expect its profit to drop over the current 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 Harbin Electric Corporation Jiamusi Electric MachineLtd's Profit Performance

We'd posit that Harbin Electric Corporation Jiamusi Electric MachineLtd's statutory earnings aren't a clean read on ongoing productivity, due to the large unusual item. Therefore, it seems possible to us that Harbin Electric Corporation Jiamusi Electric MachineLtd's true underlying earnings power is actually less than its statutory profit. But at least holders can take some solace from the 58% per annum growth in EPS for the last three. 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'd like to know more about Harbin Electric Corporation Jiamusi Electric MachineLtd as a business, it's important to be aware of any risks it's facing. You'd be interested to know, that we found 2 warning signs for Harbin Electric Corporation Jiamusi Electric MachineLtd and you'll want to know about these.

This note has only looked at a single factor that sheds light on the nature of Harbin Electric Corporation Jiamusi Electric MachineLtd'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. 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.