Despite Rubellite Energy Inc.'s (TSE:RBY) recent earnings report having lackluster headline numbers, the market responded positively. We think that shareholders might be missing some concerning factors that our analysis found.

Check out our latest analysis for Rubellite Energy

In order to understand the potential for per share returns, it is essential to consider how much a company is diluting shareholders. Rubellite Energy expanded the number of shares on issue by 9.3% over the last year. As a result, its net income is now split between a greater number of shares. Per share metrics like EPS help us understand how much actual shareholders are benefitting from the company's profits, while the net income level gives us a better view of the company's absolute size. You can see a chart of Rubellite Energy's EPS by clicking here.

A Look At The Impact Of Rubellite Energy's Dilution On Its Earnings Per Share (EPS)

As it happens, we don't know how much the company made or lost three years ago, because we don't have the data. And even focusing only on the last twelve months, we see profit is down 37%. Sadly, earnings per share fell further, down a full 42% in that time. So you can see that the dilution has had a bit of an impact on shareholders.

If Rubellite Energy's EPS can grow over time then that drastically improves the chances of the share price moving in the same direction. 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 Rubellite Energy's Profit Performance

Over the last year Rubellite Energy issued new shares and so, there's a noteworthy divergence between EPS and net income growth. Because of this, we think that it may be that Rubellite Energy's statutory profits are better than its underlying earnings power. In further bad news, its earnings per share decreased in the last year. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. When we did our research, we found 3 warning signs for Rubellite Energy (1 is a bit concerning!) that we believe deserve your full attention.