Earnings Preview For Aehr Test Systems

On Thursday, July 15, Aehr Test Systems AEHR 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 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

Aehr Test Systems EPS will likely be near $0.02 while revenue will be around $7.03 million, according to analysts. Aehr Test Systems reported a loss of $0.03 when it published results during the same quarter last year. Sales in that period totaled $3.77 million.

Why Analyst Estimates And Earnings Surprises Are Important

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

If the company were to match the consensus estimate, earnings would be up 166.67%. Sales would be up 86.32% on a year-over-year basis. Aehr Test Systems's reported EPS has stacked up against analyst estimates in the past like this:

Stock Performance

Shares of Aehr Test Systems were trading at $2.93 as of July 13. Over the last 52-week period, shares are up 18.85%. Given that these returns are generally positive, long-term shareholders are probably content going into this earnings release.

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