Soft earnings didn't appear to concern DuPont de Nemours, Inc.'s (NYSE:DD) 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
For anyone who wants to understand DuPont de Nemours' profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by US$1.1b 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. DuPont de Nemours took a rather significant hit from unusual items in the year to September 2024. 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 DuPont de Nemours' Profit Performance
As we discussed above, we think the significant unusual expense will make DuPont de Nemours' statutory profit lower than it would otherwise have been. Based on this observation, we consider it possible that DuPont de Nemours' statutory profit actually understates its earnings potential! Unfortunately, though, its earnings per share actually fell back over the last year. 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. If you'd like to know more about DuPont de Nemours as a business, it's important to be aware of any risks it's facing. In terms of investment risks, we've identified 3 warning signs with DuPont de Nemours, and understanding them should be part of your investment process.
This note has only looked at a single factor that sheds light on the nature of DuPont de Nemours' 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.
