Earnings Outlook for Watts Water Technologies

On Tuesday, May 04, Watts Water Technologies WTS will release its latest earnings report. Check out Benzinga's preview to understand the implications.

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

Wall Street analysts see Watts Water Technologies reporting earnings of $1.0 per share on sales of $386.01 million. Watts Water Technologies reported a per-share profit of $0.95 when it published results during the same quarter last year. Sales in that period totaled $382.60 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 analyst consensus estimate would represent a 5.26% increase in the company's EPS figure. Sales would be up 0.89% on a year-over-year basis. Here is how the Watts Water Technologies's reported EPS has stacked up against analyst estimates in the past:

Stock Performance

For a full 12 months, the return has risen by 53.6%. Given that these returns are generally positive, long-term shareholders are probably relaxed going into this earnings release. Long-term shareholders are already enjoying 12-month gains prior to the announcement.

Do not be surprised to see the stock move on comments made during its conference call. Watts Water Technologies is scheduled to hold the call at 09:00:00 ET and can be accessed here.