Capital Southwest Earnings Preview

On Tuesday, May 25, Capital Southwest CSWC will release its latest earnings report. Check out Benzinga's preview to understand the implications.

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 Capital Southwest modeled for quarterly EPS of $0.43 on revenue of $17.60 million. In the same quarter last year, Capital Southwest reported EPS of $0.37 on revenue of $15.04 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 analyst consensus estimate would represent a 16.22% increase in the company's earnings. Revenue would be up 17.04% 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 Capital Southwest were trading at $24.92 as of May 21. Over the last 52-week period, shares are up 80.23%. Given that these returns are generally positive, long-term shareholders should be content going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Capital Southwest is scheduled to hold the call at 11:00:00 ET and can be accessed here.