Earnings Preview for Yum China Holdings

On Tuesday, April 27, Yum China Holdings YUMC will release its latest earnings report. Benzinga's outlook for Yum China Holdings 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

Based on management's projections, Yum China Holdings analysts model for earnings of $0.48 per share on sales of $2.39 billion. In the same quarter last year, Yum China Holdings announced EPS of $0.16 on revenue of $1.75 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 report earnings in line when it publishes results Tuesday, earnings would be up 200.0%. Revenue would be up 36.26% from the year-ago period. Here is how the company's EPS has stacked up against analyst estimates in the past:

Stock Performance

Shares of Yum China Holdings were trading at $59.1 as of April 23. Over the last 52-week period, shares are up 30.61%. 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. Yum China Holdings is scheduled to hold the call at 20:00:00 ET and can be accessed here.