Preview: AutoNation's Earnings

AutoNation AN releases its next round of earnings this Tuesday, April 20. Here is Benzinga's essential guide to AutoNation's Q1 earnings report.

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

Analysts predict AutoNation will report earnings of $1.87 per share on revenue of $5.04 billion. AutoNation earnings in the same period a year ago was $0.91 per share. Quarterly sales came in at $4.67 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.

The analyst consensus estimate would represent a 105.49% increase in the company's EPS figure. Revenue would be up 7.99% from the year-ago period. Here is how the company's reported EPS has compared to analyst estimates in the past:

Stock Performance

Shares of AutoNation were trading at $97.02 as of April 16. Over the last 52-week period, shares are up 234.54%. Given that these returns are generally positive, long-term shareholders should be content going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. AutoNation is scheduled to hold the call at 10:00:00 ET and can be accessed here.