Preview: Illinois Tool Works's Earnings

Illinois Tool Works ITW unveils its next round of earnings this Friday, April 30. Get prepared with Benzinga's ultimate preview for Illinois Tool Works's Q1 earnings.

Net Income, Earnings, 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 covering Illinois Tool Works modeled for quarterly EPS of $1.9 on revenue of $3.44 billion. In the same quarter last year, Illinois Tool Works reported EPS of $1.77 on revenue of $3.23 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 match the consensus estimate, earnings would be up 7.34%. Revenue would be up 6.57% from the year-ago period. Here is how the Illinois Tool Works's reported EPS has stacked up against analyst estimates in the past:

Stock Performance

Shares of Illinois Tool Works were trading at $229.79 as of April 28. Over the last 52-week period, shares are up 44.77%. Given that these returns are generally positive, long-term shareholders can be satisfied going into this earnings release.

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