The subdued market reaction suggests that City Developments Limited's (SGX:C09) recent earnings didn't contain any surprises. We think that investors are worried about some weaknesses underlying the earnings.

We've discovered 2 warning signs about City Developments. View them for free.

SGX:C09 Earnings and Revenue History April 15th 2025

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How Do Unusual Items Influence Profit?

Importantly, our data indicates that City Developments' profit received a boost of S$265m in unusual items, over the last year. While we like to see profit increases, we tend to be a little more cautious when unusual items have made a big contribution. 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. City Developments had a rather significant contribution from unusual items relative to its profit to December 2024. 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.

Our Take On City Developments' Profit Performance

As we discussed above, we think the significant positive unusual item makes City Developments' earnings a poor guide to its underlying profitability. For this reason, we think that City Developments' statutory profits may be a bad guide to its underlying earnings power, and might give investors an overly positive impression of the company. But the good news is that its EPS growth over the last three years has been very impressive. 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. For instance, we've identified 2 warning signs for City Developments (1 can't be ignored) you should be familiar with.

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

CityDev jumps 2.4% at 1:47 pm, Apr 17th.