Discover Financial's Earnings: A Preview

Discover Financial DFS will be releasing its next round of earnings this Wednesday, April 21. For all of the relevant information, here is your guide for Wednesday'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

Discover Financial earnings will be near $2.82 per share on sales of $2.77 billion, according to analysts. In the same quarter last year, Discover Financial reported a loss per share of $0.25 on sales of $2.89 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.

The Wall Street consensus estimate for earnings would represent a 1228.0% increase for the company. Revenue would be down 4.09% from the same quarter last year. Here is how the company's EPS has stacked up against analyst estimates in the past:

Stock Performance

Over the last 52-week period, shares are up 181.71%. 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. Discover Financial is scheduled to hold the call at 08:00:00 ET and can be accessed here.