On Wednesday, July 21, Lithia Motors LAD will release its latest earnings report. Benzinga's report can help you figure out the ins and outs of the earnings 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
Wall Street expects EPS of $5.85 and sales around $4.99 billion. Lithia Motors earnings in the same period a year ago was $3.72 per share. Quarterly sales came in at $2.76 billion.
Why Analyst Estimates And Earnings Surprises Are Important
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 match the consensus estimate when it reports Wednesday, EPS would be up 57.26%. Revenue would be up 80.86% from the year-ago period. Here is how the company's reported EPS has stacked up against analyst estimates in the past:
| Quarter | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 |
|---|---|---|---|---|
| EPS Estimate | 4.74 | 5.06 | 5.86 | 1.54 |
| EPS Actual | 5.89 | 5.46 | 6.89 | 3.72 |
| Revenue Estimate | 3.88 B | 3.93 B | 3.57 B | 2.42 B |
| Revenue Actual | 4.34 B | 3.94 B | 3.62 B | 2.76 B |
Stock Performance
Shares of Lithia Motors were trading at $335.8 as of July 19. Over the last 52-week period, shares are up 60.63%. 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. Lithia Motors is scheduled to hold the call at 10:00:00 ET and can be accessed here.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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