On Monday, November 23, Central Garden & Pet (NASDAQ: CENT) will release its latest earnings report. Check out Benzinga’s preview to understand the implications.
Net Income, Earnings, And Earnings Per Share
Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.
Earnings And Revenue
Based on management’s projections, Central Garden & Pet analysts modeled for a loss of $0.06 per share on sales of $595.00 million. Central Garden & Pet EPS in the same period a year ago totaled $0.04. Revenue was $540.74 million.
What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?
Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the “consensus estimates”; these consensus estimates can have a significant effect on a company’s performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an “earnings surprise”, which can really move a stock depending on the difference between actual and estimated values.
If the company were to match the consensus estimate when it reports Monday, earnings would be down 250.0%. Revenue would be up 10.03% from the year-ago period. Here is how the company’s reported EPS has stacked up against analyst estimates in the past:
|Quarter||Q3 2020||Q2 2020||Q1 2020||Q4 2019|
|Revenue Estimate||724.05 M||692.90 M||476.20 M||517.00 M|
|Revenue Actual||833.48 M||703.23 M||482.83 M||540.74 M|
Over the last 52-week period, shares are up 28.23%. Given that these returns are generally positive, long-term shareholders can relax going into this earnings release. Long-term shareholders are already enjoying 12-month gains prior to the announcement.
Do not be surprised to see the stock move on comments made during its conference call. Central Garden & Pet is scheduled to hold the call at 16:30:00 ET and can be accessed here.