Alpha & Omega's Earnings: A Preview

Alpha & Omega AOSL announces its next round of earnings this Thursday, November 05. Here is Benzinga's everything-that-matters guide for this Thursday's Q1 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 expects EPS of $0.51 and sales around $150.03 million. Alpha & Omega reported a per-share profit of $0.26 when it published results during the same quarter last year. Sales in that period totaled $117.80 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 post earnings in line with the consensus estimate when it reports Thursday, EPS would be up 96.15%. Revenue would be up 27.36% from the same quarter last year. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Stock Performance

Shares of Alpha & Omega were trading at $16.12 as of November 03. Over the last 52-week period, shares are up 31.42%. Given that these returns are generally positive, long-term shareholders are probably content going into this earnings release.

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