The market seemed underwhelmed by the solid earnings posted by Golar LNG Limited (NASDAQ:GLNG) recently. Our analysis suggests that there are some reasons for hope that investors should be aware of.

View our latest analysis for Golar LNG

How Do Unusual Items Influence Profit?

For anyone who wants to understand Golar LNG's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by US$23m due to unusual items. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. 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 Golar LNG 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 Golar LNG's Profit Performance

Because unusual items detracted from Golar LNG's earnings over the last year, you could argue that we can expect an improved result in the current quarter. Based on this observation, we consider it likely that Golar LNG's statutory profit actually understates its earnings potential! And it's also positive that the company showed enough improvement to book a profit this year, after losing money last year. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. If you want to do dive deeper into Golar LNG, you'd also look into what risks it is currently facing. To that end, you should learn about the 2 warning signs we've spotted with Golar LNG (including 1 which is significant).

This note has only looked at a single factor that sheds light on the nature of Golar LNG'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. 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.