HELLA GmbH & Co. KGaA’s (ETR:HLE) recent weak earnings report didn’t cause a big stock movement. We think that investors are worried about some weaknesses underlying the earnings.
For anyone who wants to understand HELLA GmbH KGaA’s profit beyond the statutory numbers, it’s important to note that during the last twelve months statutory profit gained from €196m 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 crunched the numbers on thousands of publicly listed companies, we found that a boost from unusual items in a given year is often not repeated the next year. And, after all, that’s exactly what the accounting terminology implies. HELLA GmbH KGaA had a rather significant contribution from unusual items relative to its profit to September 2025. As a result, we can surmise that the unusual items are making its statutory profit significantly stronger 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.
As we discussed above, we think the significant positive unusual item makes HELLA GmbH KGaA’s earnings a poor guide to its underlying profitability. As a result, we think it may well be the case that HELLA GmbH KGaA’s underlying earnings power is lower than its statutory profit. In further bad news, its earnings per share decreased in 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. Keep in mind, when it comes to analysing a stock it’s worth noting the risks involved. Case in point: We’ve spotted 2 warning signs for HELLA GmbH KGaA you should be aware of.
This note has only looked at a single factor that sheds light on the nature of HELLA GmbH KGaA’s 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. 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.