We Think That There Are More Issues For Seika (TSE:8061) Than Just Sluggish Earnings

Last week's earnings announcement from Seika Corporation (TSE:8061) was disappointing to investors, with a sluggish profit figure. We did some analysis, and found that there are some reasons to be cautious about the headline numbers.We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.TSE:8061 Earnings and Revenue History November 20th 2025 The Impact Of Unusual Items On Profit Importantly, our data indicates that Seika's profit received a boost of JP¥1.1b in unusual items, over the last year. 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. Assuming those unusual items don't show up again in the current year, we'd thus expect profit to be weaker next year (in the absence of business growth, that is). Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Seika. Our Take On Seika's Profit Performance Arguably, Seika's statutory earnings have been distorted by unusual items boosting profit. Therefore, it seems possible to us that Seika's true underlying earnings power is actually less than its statutory profit. But the good news is that its EPS growth over the last three years has been very impressive. 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. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. For example, we've discovered 3 warning signs that you should run your eye over to get a better picture of Seika. Today we've zoomed in on a single data point to better understand the nature of Seika's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. 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. 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.