Preview: General Mills's Earnings

General Mills GIS will be releasing its next round of earnings this Wednesday, June 30. For all of the relevant information, here is your guide for Wednesday's Q4 earnings announcement.

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

Wall Street analysts see General Mills reporting earnings of $0.84 per share on revenue of $4.36 billion. In the same quarter last year, General Mills posted EPS of $1.1 on sales of $5.02 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.

The Wall Street estimate would represent a 23.64% decline in the company's earnings. Sales would be down 13.2% on a year-over-year basis. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Stock Performance

Shares of General Mills were trading at $60.55 as of June 28. Over the last 52-week period, shares are up 0.61%. 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. General Mills is scheduled to hold the call at 09:00:00 ET and can be accessed here.