Earnings Preview for CarMax

On Friday, June 25, CarMax KMX will release its latest earnings report. Benzinga's report can help you figure out the ins and outs of the earnings release.

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

Based on management's projections, CarMax analysts model for earnings of $1.63 per share on sales of $6.24 billion. CarMax's loss in the same period a year ago was $0.15 per share. Quarterly sales came in at $3.23 billion.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

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 estimate would represent a 1186.67% increase in the company's earnings. Revenue would be have grown 93.25% 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 of CarMax are up 39.32%.

Do not be surprised to see the stock move on comments made during its conference call. CarMax is scheduled to hold the call at 09:00:00 ET and can be accessed here.