AutoNation Earnings Preview

On Monday, July 19, AutoNation AN will report its last quarter's earnings. Here is Benzinga's preview of the company's release.

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

AutoNation earnings will be near $2.58 per share on sales of $6.02 billion, according to analysts. AutoNation reported a per-share profit of $1.41 when it published results during the same quarter last year. Sales in that period totaled $4.53 billion.

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

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 report earnings in line when it publishes results Monday, quarterly profit would be up 82.98%. Sales would be have grown 32.8% 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

Shares of AutoNation were trading at $103.39 as of July 15. Over the last 52-week period, shares are up 134.03%. Given that these returns are generally positive, long-term shareholders can be satisfied going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. AutoNation is scheduled to hold the call at 10:00:00 ET and can be accessed here.