Earnings Outlook For Workday

On Wednesday, May 26, Workday WDAY will release its latest earnings report. Here is Benzinga's outlook for the company.

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 Workday modeled for quarterly EPS of $0.73 on revenue of $1.16 billion. Workday earnings in the same period a year ago was $0.44 per share. Quarterly sales came in at $1.02 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.

If the company were to match the consensus estimate when it reports Wednesday, earnings would be up 65.91%. Sales would be up 13.95% on a year-over-year basis. Workday's reported EPS has stacked up against analyst estimates in the past like this:

Stock Performance

Over the last 52-week period, shares are up 38.65%. Given that these returns are generally positive, long-term shareholders can be content going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Workday is scheduled to hold the call at 16:30:00 ET and can be accessed here.