Reata Pharmaceuticals's Earnings Outlook

Reata Pharmaceuticals RETA releases its next round of earnings this Thursday, May 06. Get the latest predictions in Benzinga's essential guide to the company's Q1 earnings 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

Wall Street analysts see Reata Pharmaceuticals reporting a quarterly loss of $2.1 per share on sales of $1.19 million. In the same quarter last year, Reata Pharmaceuticals reported EPS of $1.47 on revenue of $1.35 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.

If the company were to report earnings in line when it publishes results Thursday, earnings would be down 42.86%. Sales would be down 12.05% on a year-over-year basis. Reata Pharmaceuticals's reported EPS has stacked up against analyst estimates in the past like this:

Stock Performance

Shares of Reata Pharmaceuticals were trading at $92 as of May 04. Over the last 52-week period, shares are down 41.89%. Given that these returns are generally negative, long-term shareholders are probably down going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Reata Pharmaceuticals is scheduled to hold the call at 08:30:00 ET and can be accessed here.