Preview: Northern Trust's Earnings

Northern Trust NTRS releases its next round of earnings this Wednesday, October 21. Here is Benzinga's essential guide to Northern Trust's Q3 earnings report.

The Definitions Of Net Income, Earnings And Earnings Per Share (EPS)

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 Northern Trust modeled for quarterly EPS of $1.38 on revenue of $1.47 billion. In the same quarter last year, Northern Trust reported earnings per share of $1.69 on revenue of $1.54 billion.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Wall Street analysts who study this company will publish analyst estimates of its revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates," and these consensus estimates can have a significant effect on a company's performance when it releases earnings. When a company posts earnings or revenue above or below the consensus estimate, it has posted an "earnings surprise."

If the company were to post earnings in line with the consensus estimate when it reports Wednesday, EPS would be down 18.34%. Revenue would be down 4.42% from the year-ago period. Here is how the company's reported EPS has compared to analyst estimates in the past:

Stock Performance

Shares of Northern Trust were trading at $85.41 as of October 19. Over the last 52-week period, shares are down 13.01%. Given that these returns are generally negative, long-term shareholders are probably unhappy going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Northern Trust is scheduled to hold the call at 10:00:00 ET and can be accessed here: https://edge.media-server.com/mmc/p/n7uu99j4