Preview: Cara Therapeutics's Earnings

On Thursday, February 25, Cara Therapeutics CARA will release its latest earnings report. Decipher the announcement with Benzinga's help.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

Based on management's projections, Cara Therapeutics analysts model for earnings of $0.36 per share on sales of $48.63 million. Cara Therapeutics reported a loss of $0.61 when it published results during the same quarter last year. Sales in that period totaled $4.51 million.

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 report earnings in line when it publishes results Thursday, earnings would be up 159.02%. Revenue would be up 978.03% from the year-ago period. Cara Therapeutics's reported EPS has stacked up against analyst estimates in the past like this:

Stock Performance

Over the last 52-week period, shares of Cara Therapeutics are up 29.77%.

Do not be surprised to see the stock move on comments made during its conference call. Cara Therapeutics is scheduled to hold the call at 16:30:00 ET and can be accessed here.