Soft earnings didn't appear to concern Herc Holdings Inc.'s (NYSE:HRI) shareholders over the last week. Our analysis suggests that while the profits are soft, the foundations of the business are strong.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.NYSE:HRI Earnings and Revenue History May 1st 2025

How Do Unusual Items Influence Profit?

To properly understand Herc Holdings' profit results, we need to consider the US$258m expense attributed to unusual items. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. 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. Assuming those unusual expenses don't come up again, we'd therefore expect Herc Holdings 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 Herc Holdings' Profit Performance

Unusual items (expenses) detracted from Herc Holdings' earnings over the last year, but we might see an improvement next year. Because of this, we think Herc Holdings' earnings potential is at least as good as it seems, and maybe even better! On the other hand, its EPS actually shrunk in the last twelve months. 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 want to do dive deeper into Herc Holdings, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 3 warning signs for Herc Holdings (of which 1 is significant!) you should know about.

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

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