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Earnings Outlook for Yum China Holdings

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On Wednesday, October 28, Yum China Holdings (NYSE: YUMC) will release its latest earnings report. Here is Benzinga's outlook for the company.

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 predict Yum China Holdings will report earnings of $0.49 per share on revenue of $2.30 billion. Yum China Holdings EPS in the same period a year ago totaled $0.58. Revenue was $2.32 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 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.

If the company were to report earnings in line when it publishes results Wednesday, earnings would be down 15.52%. Revenue would be down 0.82% on a year-over-year basis. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019
EPS Estimate 0.24 -0.18 0.19 0.55
EPS Actual 0.35 0.16 0.25 0.58
Revenue Estimate 1.96 B 1.56 B 2.03 B 2.38 B
Revenue Actual 1.90 B 1.75 B 2.03 B 2.32 B

Stock Performance

Shares of Yum China Holdings were trading at $54.63 as of October 26. Over the last 52-week period, shares are up 23.35%. 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. Yum China Holdings is scheduled to hold the call at 20:00:00 ET and can be accessed here.

 

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Posted-In: Earnings