Preview: Foot Locker's Earnings

Foot Locker FL announces its next round of earnings this Friday, May 21. Here is Benzinga's everything-that-matters guide for this Friday's Q1 earnings announcement.

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 Foot Locker management projections, analysts predict EPS of $1.05 on revenue of $1.86 billion. Foot Locker EPS in the same period a year ago totaled $0.67. Revenue was $1.18 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 analyst consensus estimate would represent a 256.72% increase in the company's EPS figure. Revenue would be have grown 58.16% from the same quarter last year. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Stock Performance

For a full 12 months, the return has risen by 124.39%. 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. Foot Locker is scheduled to hold the call at 09:00:00 ET and can be accessed here.