The market shrugged off Calibre Mining Corp.'s (TSE:CXB) weak earnings report last week. We looked at the details, and we think that investors may be responding to some encouraging factors.

Check out our latest analysis for Calibre Mining

In order to understand the potential for per share returns, it is essential to consider how much a company is diluting shareholders. Calibre Mining expanded the number of shares on issue by 73% 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. You can see a chart of Calibre Mining's EPS by clicking here.

How Is Dilution Impacting Calibre Mining's Earnings Per Share (EPS)?

Calibre Mining's net profit dropped by 38% per year over the last three years. Even looking at the last year, profit was still down 20%. Like a sack of potatoes thrown from a delivery truck, EPS fell harder, down 39% in the same period. So you can see that the dilution has had a fairly significant impact on shareholders.

In the long term, if Calibre Mining's earnings per share can increase, then the share price should too. But on the other hand, we'd be far less excited to learn profit (but not EPS) was improving. 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.

The Impact Of Unusual Items On Profit

Alongside that dilution, it's also important to note that Calibre Mining's profit suffered from unusual items, which reduced profit by US$14m in the last twelve months. 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 that's hardly a surprise given these line items are considered unusual. If Calibre Mining doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

Our Take On Calibre Mining's Profit Performance

Calibre Mining suffered from unusual items which depressed its profit in its last report; if that is not repeated then profit should be higher, all else being equal. But on the other hand, the company issued more shares, so without buying more shares each shareholder will end up with a smaller part of the profit. Based on these factors, we think it's very unlikely that Calibre Mining's statutory profits make it seem much weaker than it is. If you want to do dive deeper into Calibre Mining, you'd also look into what risks it is currently facing. Case in point: We've spotted 2 warning signs for Calibre Mining you should be mindful of and 1 of them is significant.