Market Overview

Earnings Outlook for Valero Energy

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On Thursday, October 22, Valero Energy (NYSE: VLO) will report its last quarter's earnings. Here is Benzinga's preview of the company's release.

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

Wall Street expects an EPS loss of $1.37 and sales around $16.55 billion. Valero Energy earnings in the same period a year ago was $1.48 per share. Quarterly sales came in at $27.25 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 192.57% decline in the company's EPS figure. Revenue would be down 39.26% from the year-ago period. The company's reported EPS has stacked up against analyst estimates in the past like this:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019
EPS Estimate -1.40 -0.15 1.65 1.35
EPS Actual -1.25 0.34 2.13 1.48
Revenue Estimate 15.94 B 17.77 B 25.78 B 25.02 B
Revenue Actual 10.40 B 22.10 B 27.88 B 27.25 B

Stock Performance

Over the past 52-week period, shares of Valero Energy have declined 58.85%. Given that these returns are generally negative, long-term shareholders are probably a little upset going into this earnings release.

 

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