PayPal Holdings's Earnings: A Preview

PayPal Holdings PYPL announces its next round of earnings this Monday, November 02. Here is Benzinga's everything-that-matters guide for this Monday's Q3 earnings announcement.

What Are Earnings, Net Income, 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

Wall Street analysts see PayPal Holdings reporting earnings of $0.94 per share on sales of $5.41 billion. PayPal Holdings reported a profit of $0.61 per share when it published results during the same quarter last year. Sales in that period totaled $4.38 billion.

Why Analyst Estimates And Earnings Surprises Are Important

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

If the company were to match the consensus estimate when it reports Monday, earnings would be up 54.1%. Revenue would be up 23.57% from the year-ago period. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Stock Performance

Over the last 52-week period, shares are up 87.25%. Given that these returns are generally positive, long-term shareholders can be content going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. PayPal Holdings is scheduled to hold the call at 17:00:00 ET and can be accessed here.