Market Overview

SAP's Earnings Outlook

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On Monday, October 26, SAP (NYSE: SAP) will release its latest earnings report. Check out Benzinga's preview to understand the implications.

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

SAP EPS is expected to be around $1.53, according to sell-side analysts. Sales will likely be near $8.10 billion. In the same quarter last year, SAP reported earnings per share of $1.42 on revenue of $7.42 billion.

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

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.

If the company were to post earnings in line with the consensus estimate when it reports Monday, EPS would be up 7.75%. Revenue would be up 9.14% from the same quarter last year. SAP'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 1.33 0.92 1.89 1.87
EPS Actual 1.29 0.94 2.04 1.42
Revenue Estimate 7.84 B 6.46 B 8.89 B 8.81 B
Revenue Actual 7.43 B 7.19 B 9.02 B 7.42 B

Stock Performance

Shares of SAP were trading at $147.6 as of October 22. Over the last 52-week period, shares are up 11.12%. 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. SAP is scheduled to hold the call at 09:00:00 ET and can be accessed here.

 

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Posted-In: Earnings