Earnings Preview: Resources Connection

Resources Connection RGP releases its next round of earnings this Wednesday, July 21. Here is Benzinga's essential guide to Resources Connection's Q4 earnings report.

Net Income, Earnings, 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

Analysts covering Resources Connection modeled for quarterly EPS of $0.2 on revenue of $165.70 million. In the same quarter last year, Resources Connection reported earnings per share of $0.16 on revenue of $178.57 million.

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 25.0% increase in the company's earnings. Revenue would be down 7.21% from the year-ago period. Here is how the Resources Connection's reported EPS has stacked up against analyst estimates in the past:

Stock Performance

Shares of Resources Connection were trading at $13.38 as of July 19. Over the last 52-week period, shares are up 14.86%. Given that these returns are generally positive, long-term shareholders are probably happy going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Resources Connection is scheduled to hold the call at 17:00:00 ET and can be accessed here.