Viavi Solutions Inc.'s (NASDAQ:VIAV) earnings announcement last week was disappointing for investors, despite the decent profit numbers. We have done some analysis and have found some comforting factors beneath the profit numbers.

Our free stock report includes 2 warning signs investors should be aware of before investing in Viavi Solutions. Read for free now.NasdaqGS:VIAV Earnings and Revenue History May 10th 2025

How Do Unusual Items Influence Profit?

For anyone who wants to understand Viavi Solutions' profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by US$9.2m 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. If Viavi Solutions 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 Viavi Solutions' Profit Performance

Because unusual items detracted from Viavi Solutions' 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 Viavi Solutions' 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. 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. If you'd like to know more about Viavi Solutions as a business, it's important to be aware of any risks it's facing. You'd be interested to know, that we found 2 warning signs for Viavi Solutions and you'll want to know about them.

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

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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.

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