Earnings Preview: Iridium Communications

Iridium Communications IRDM will be releasing its next round of earnings this Tuesday, July 20. For all of the relevant information, here is your guide for Tuesday's Q2 earnings announcement.

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

Analysts are predicting Iridium Communications will report a loss of $0.06 per share on revenue of $148.53 million. In the same quarter last year, Iridium Communications posted a loss of $0.09 per share on sales of $140.17 million.

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 match the consensus estimate, earnings would be up 33.33%. Sales would be up 5.96% on a year-over-year basis. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Stock Performance

Shares of Iridium Communications were trading at $36.96 as of July 16. Over the last 52-week period, shares are up 35.86%. Given that these returns are generally positive, long-term shareholders are probably happy going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Iridium Communications is scheduled to hold the call at 08:30:00 ET and can be accessed here.