Aker Solutions' (OB:AKSO) Earnings Seem To Be Promising

The stock was sluggish on the back of Aker Solutions ASA's (OB:AKSO) recent earnings report. Along with the solid headline numbers, we think that investors have some reasons for optimism.

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.

A Closer Look At Aker Solutions' Earnings

As finance nerds would already know, the accrual ratio from cashflow is a key measure for assessing how well a company's free cash flow (FCF) matches its profit. The accrual ratio subtracts the FCF from the profit for a given period, and divides the result by the average operating assets of the company over that time. The ratio shows us how much a company's profit exceeds its FCF.

That means a negative accrual ratio is a good thing, because it shows that the company is bringing in more free cash flow than its profit would suggest. While it's not a problem to have a positive accrual ratio, indicating a certain level of non-cash profits, a high accrual ratio is arguably a bad thing, because it indicates paper profits are not matched by cash flow. To quote a 2014 paper by Lewellen and Resutek, "firms with higher accruals tend to be less profitable in the future".

For the year to September 2026, Aker Solutions had an accrual ratio of -0.35. That indicates that its free cash flow quite significantly exceeded its statutory profit. To wit, it produced free cash flow of kr4.7b during the period, dwarfing its reported profit of kr3.06b. Aker Solutions shareholders are no doubt pleased that free cash flow improved over the last twelve months. However, that's not all there is to consider. We can see that unusual items have impacted its statutory profit, and therefore the accrual ratio.

View our latest analysis for Aker Solutions

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.

The Impact Of Unusual Items On Profit

Surprisingly, given Aker Solutions' accrual ratio implied strong cash conversion, its paper profit was actually boosted by kr723m in unusual items. While we like to see profit increases, we tend to be a little more cautious when unusual items have made a big contribution. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And that's as you'd expect, given these boosts are described as 'unusual'. We can see that Aker Solutions' positive unusual items were quite significant relative to its profit in the year to September 2026. As a result, we can surmise that the unusual items are making its statutory profit significantly stronger than it would otherwise be.

Our Take On Aker Solutions' Profit Performance

In conclusion, Aker Solutions' accrual ratio suggests its statutory earnings are of good quality, but on the other hand the profits were boosted by unusual items. After taking into account all these factors, we think that Aker Solutions' statutory results are a decent reflection of its underlying earnings power. If you want to do dive deeper into Aker Solutions, you'd also look into what risks it is currently facing. For instance, we've identified 2 warning signs for Aker Solutions (1 makes us a bit uncomfortable) you should be familiar with.

Our examination of Aker Solutions has focussed on certain factors that can make its earnings look better than they are. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.