Yahoo Finance Investors Can Find Comfort In Campbell Soup's (NASDAQ:CPB) Earnings Quality
Soft earnings didn't appear to concern Campbell Soup Company's (NASDAQ:CPB) shareholders over the last week. We think that the softer headline numbers might be getting counterbalanced by some positive underlying factors.
Check out our latest analysis for Campbell Soup
How Do Unusual Items Influence Profit?
For anyone who wants to understand Campbell Soup's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by US$270m 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. Assuming those unusual expenses don't come up again, we'd therefore expect Campbell Soup to produce a higher profit next year, all else being equal.
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 Campbell Soup's Profit Performance
Unusual items (expenses) detracted from Campbell Soup's earnings over the last year, but we might see an improvement next year. Because of this, we think Campbell Soup's earnings potential is at least as good as it seems, and maybe even better! Unfortunately, though, its earnings per share actually fell back over the last year. 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 Campbell Soup as a business, it's important to be aware of any risks it's facing. For instance, we've identified 3 warning signs for Campbell Soup (1 can't be ignored) you should be familiar with.
Today we've zoomed in on a single data point to better understand the nature of Campbell Soup's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. 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 with significant insider holdings 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.
