Earnings Preview for Synopsys

Synopsys SNPS unveils its next round of earnings this Wednesday, May 19. Here is Benzinga's everything-that-matters guide for the 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

Synopsys EPS is expected to be around $1.52, according to sell-side analysts. Sales will likely be near $988.70 million. Synopsys EPS in the same period a year ago totaled $1.22. Sales were $861.33 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 Wednesday, quarterly profit would be up 24.59%. Revenue would be up 14.79% from the same quarter last year. Here is how the company's EPS has stacked up against analyst estimates in the past:

Stock Performance

For a full 12 months, the return has risen by 42.96%. Given that these returns are generally positive, long-term shareholders are probably relaxed going into this earnings release. Long-term shareholders are already enjoying 12-month gains prior to the announcement.

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