Assessing Net Profits

After learning what a business does, the first financial measure I try to understand is the history of the company's net profits. The term "net profits" is often used interchangeably with "earnings." (This use of one or more terms to describe the same thing happens frequently in finance and confirms its reputation for imprecision. I would prefer "earnings" connote "taxable income," but that would not fit well with "earnings per share" in which the usage is identical to "net profits.") Both are often used to describe what's left over for the owners after all other bills have been paid. This seemingly straightforward task is complicated by the regularity of one-time exceptions, such as merger fees or tax adjustments or lawsuit costs. In addition, companies put into the "one-time exception" category regular restructuring costs. These patterns are most noticeable in the consumer staples group of companies, marring otherwise consistent earnings. What's an analyst to do? I think that including these charge-offs as a likely occurrence in the future based on past history is the best course of action, even though that often prevents one from "paying up" for the stock.