Kala Pharmaceuticals Earnings Preview

Kala Pharmaceuticals KALA announces its next round of earnings this Wednesday, May 05. Here is Benzinga's everything-that-matters guide for this 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

Analysts covering Kala Pharmaceuticals have modeled for quarterly EPS loss of $0.68 on revenue of $4.18 million. Kala Pharmaceuticals EPS in the same period a year ago totaled $0.54. Revenue was $1.07 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.

The Wall Street consensus estimate for earnings would represent a 25.93% decrease for the company. Sales would be up 290.29% from the year-ago period. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Stock Performance

Shares of Kala Pharmaceuticals were trading at $6.97 as of May 03. Over the last 52-week period, shares are down 43.16%. Given that these returns are generally negative, long-term shareholders are probably down going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Kala Pharmaceuticals is scheduled to hold the call at 08:00:00 ET and can be accessed here.