Earnings Preview: Travelers Companies

Travelers Companies TRV announces its next round of earnings this Tuesday, July 20. Here is Benzinga's everything-that-matters guide for this Tuesday's Q2 earnings announcement.

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

Travelers Companies earnings will be near $2.33 per share on sales of $7.72 billion, according to analysts. In the same quarter last year, Travelers Companies reported EPS of $0.2 on revenue of $7.40 billion.

Why Analyst Estimates And Earnings Surprises Are Important

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.

The analyst consensus estimate would represent a 1265.0% increase in the company's earnings. Revenue would be up 4.31% on a year-over-year basis. Here is how the company's reported EPS has compared to analyst estimates in the past:

Stock Performance

Shares of Travelers Companies were trading at $156.39 as of July 16. Over the last 52-week period, shares are up 27.82%. Given that these returns are generally positive, long-term shareholders are probably satisfied going into this earnings release.

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