SLM's Earnings: A Preview

On Wednesday, July 21, SLM SLM 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 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 SLM modeled for quarterly EPS of $0.37 on revenue of $335.50 million. SLM EPS in the same period a year ago totaled $0.22. Revenue was $348.77 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.

The Wall Street estimate would represent a 268.18% increase in the company's earnings. Revenue would be down 3.81% 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 SLM were trading at $19.5 as of July 19. Over the last 52-week period, shares are up 179.11%. Given that these returns are generally positive, long-term shareholders are probably content going into this earnings release.

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