JBT Marel Corporation's (NYSE:JBTM) stock showed strength, with investors undeterred by its weak earnings report. Sometimes, shareholders are willing to ignore soft numbers with the hope that they will improve, but our analysis suggests this is unlikely for JBT Marel.

View our latest analysis for JBT Marel

One essential aspect of assessing earnings quality is to look at how much a company is diluting shareholders. JBT Marel expanded the number of shares on issue by 65% over the last year. As a result, its net income is now split between a greater number of shares. To talk about net income, without noticing earnings per share, is to be distracted by the big numbers while ignoring the smaller numbers that talk to per share value. Check out JBT Marel's historical EPS growth by clicking on this link.

How Is Dilution Impacting JBT Marel's Earnings Per Share (EPS)?

JBT Marel's net profit dropped by 8.5% per year over the last three years. And even focusing only on the last twelve months, we see profit is down 35%. Sadly, earnings per share fell further, down a full 35% in that time. So you can see that the dilution has had a fairly significant impact on shareholders.

In the long term, if JBT Marel's earnings per share can increase, then the share price should too. However, if its profit increases while its earnings per share stay flat (or even fall) then shareholders might not see much benefit. For the ordinary retail shareholder, EPS is a great measure to check your hypothetical "share" of the company's profit.

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 JBT Marel's Profit Performance

JBT Marel issued shares during the year, and that means its EPS performance lags its net income growth. For this reason, we think that JBT Marel's statutory profits may be a bad guide to its underlying earnings power, and might give investors an overly positive impression of the company. Sadly, its EPS was down over 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'd like to know more about JBT Marel as a business, it's important to be aware of any risks it's facing. Be aware that JBT Marel is showing 2 warning signs in our investment analysis and 1 of those doesn't sit too well with us...

Today we've zoomed in on a single data point to better understand the nature of JBT Marel'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. 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.