CompanyGraph
Strips out discontinued business results, isolating the profit generated by the operations the company intends to keep running.
Net income from continuing operations is the profit from the company's ongoing business activities, excluding any businesses that were sold or discontinued.
Net income from continuing operations is the profit from the company's ongoing business activities, excluding any businesses that were sold or discontinued.
Why it's reported separately:
- Comparability: Allows comparison of ongoing operations across periods
- Forecasting: More relevant for projecting future performance
- Transparency: Separates one-time impacts from core business
- Regulatory requirement: Accounting standards require discontinued operations disclosure
What's excluded:
- Discontinued operations: Results from businesses sold or held for sale
- Gain/loss on disposal: Profit or loss from selling the discontinued business
- Related costs: Restructuring and wind-down expenses
Why it matters:
- True operating performance: Shows profits from businesses the company will continue to operate
- Valuation basis: Continuing operations are what you're valuing as an investor
- Trend analysis: More meaningful to track growth in continuing operations
- Earnings quality: Separates sustainable profits from one-time events
When analysing companies with discontinued operations, focus on continuing operations for performance trends but review discontinued items for cash flow and balance sheet impacts.