Simulations Plus's Earnings: A Preview

On Monday, April 12, Simulations Plus SLP will release its latest earnings report. Benzinga's report can help you figure out the ins and outs of the earnings release.

Net Income, Earnings, 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

Wall Street analysts see Simulations Plus reporting earnings of $0.14 per share on sales of $12.84 million. In the same quarter last year, Simulations Plus reported EPS of $0.12 on revenue of $10.35 million.

Why Analyst Estimates And Earnings Surprises Are Important

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 Monday, EPS would be up 16.67%. Revenue would be up 24.06% from the same quarter last year. Here is how the company's EPS has stacked up against analyst estimates in the past:

Stock Performance

Shares of Simulations Plus were trading at $62.36 as of April 08. Over the last 52-week period, shares are up 72.89%. Given that these returns are generally positive, long-term shareholders are probably happy going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Simulations Plus is scheduled to hold the call at 16:15:00 ET and can be accessed here.