Earnings Preview: Ally Financial

On Tuesday, July 20, Ally Financial ALLY will release its latest earnings report. Check out Benzinga's preview to understand the implications.

Net Income, Earnings, 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

Wall Street analysts see Ally Financial reporting earnings of $1.46 per share on revenue of $1.87 billion. In the same quarter last year, Ally Financial reported earnings per share of $0.61 on revenue of $1.53 billion.

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 when it reports Tuesday, EPS would be up 139.34%. Revenue would be have grown 22.38% from the same quarter last year. Here is how the Ally Financial's reported EPS has stacked up against analyst estimates in the past:

Stock Performance

Over the last 52-week period, shares of Ally Financial are up 122.48%.

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