Earnings Preview: Wells Fargo

On Wednesday, July 14, Wells Fargo WFC will release its latest earnings report. Benzinga's outlook for Wells Fargo is included in the following report.

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

Wells Fargo EPS will likely be near $0.97 while revenue will be around $17.75 billion, according to analysts. Wells Fargo EPS in the same period a year ago totaled $0.66. Revenue was $17.84 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.

If the company were to post earnings in line with the consensus estimate when it reports Wednesday, EPS would be up 246.97%. Sales would be down 0.48% 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

Over the last 52-week period, shares are up 72.8%. Given that these returns are generally positive, long-term shareholders can be content going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Wells Fargo is scheduled to hold the call at 11:30:00 ET and can be accessed here.