A lackluster earnings announcement from Brookfield Infrastructure Corporation (NYSE:BIPC) last week didn't sink the stock price. However, we believe that investors should be aware of some underlying factors which may be of concern.

Check out our latest analysis for Brookfield Infrastructure

To understand the value of a company's earnings growth, it is imperative to consider any dilution of shareholders' interests. Brookfield Infrastructure expanded the number of shares on issue by 27% over the last year. Therefore, each share now receives a smaller portion of profit. 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 Brookfield Infrastructure's EPS by clicking here.

How Is Dilution Impacting Brookfield Infrastructure's Earnings Per Share (EPS)?

Brookfield Infrastructure was losing money three years ago. And even focusing only on the last twelve months, we see profit is down 90%. Like a sack of potatoes thrown from a delivery truck, EPS fell harder, down 92% in the same period. And so, you can see quite clearly that dilution is having a rather significant impact on shareholders.

If Brookfield Infrastructure's EPS can grow over time then that drastically improves the chances of the share price moving in the same direction. But on the other hand, we'd be far less excited to learn profit (but not EPS) was improving. For that reason, you could say that EPS is more important that net income in the long run, assuming the goal is to assess whether a company's share price might grow.

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 Brookfield Infrastructure's Profit Performance

Over the last year Brookfield Infrastructure issued new shares and so, there's a noteworthy divergence between EPS and net income growth. Therefore, it seems possible to us that Brookfield Infrastructure's true underlying earnings power is actually less than its statutory profit. In further bad news, its earnings per share decreased in the last year. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. When we did our research, we found 4 warning signs for Brookfield Infrastructure (1 makes us a bit uncomfortable!) that we believe deserve your full attention.

This note has only looked at a single factor that sheds light on the nature of Brookfield Infrastructure's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying.

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.