The most recent earnings report from Archer-Daniels-Midland Company (NYSE:ADM) was disappointing for shareholders. While the headline numbers were soft, we believe that investors might be missing some encouraging factors.

Check out our latest analysis for Archer-Daniels-Midland

The Impact Of Unusual Items On Profit

For anyone who wants to understand Archer-Daniels-Midland's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by US$385m due to unusual items. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And that's hardly a surprise given these line items are considered unusual. Assuming those unusual expenses don't come up again, we'd therefore expect Archer-Daniels-Midland 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 Archer-Daniels-Midland's Profit Performance

Because unusual items detracted from Archer-Daniels-Midland's earnings over the last year, you could argue that we can expect an improved result in the current quarter. Because of this, we think Archer-Daniels-Midland'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. 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. With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. For example - Archer-Daniels-Midland has 2 warning signs we think you should be aware of.

Today we've zoomed in on a single data point to better understand the nature of Archer-Daniels-Midland'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. 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.