Earnings Preview For SAP

On Wednesday, July 21, SAP SAP will release its latest earnings report. Benzinga's outlook for SAP 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

Analysts covering SAP modeled for quarterly EPS of $1.45 on revenue of $7.94 billion. In the same quarter last year, SAP reported earnings per share of $1.29 on sales of $7.43 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 report earnings in line when it publishes results Wednesday, earnings would be up 12.4%. Revenue would be up 6.91% from the same quarter last year. The company's reported EPS has stacked up against analyst estimates in the past like this:

Stock Performance

Shares of SAP were trading at $144.81 as of July 19. Over the last 52-week period, shares are down 12.67%. Given that these returns are generally negative, long-term shareholders are probably upset going into this earnings release.

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