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Earnings Preview: Newell Brands

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Newell Brands (NASDAQ: NWL) announces its next round of earnings this Friday, October 30. Here is Benzinga's everything-that-matters guide for this Friday's Q3 earnings announcement.

What Are Earnings, Net Income, 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

Sell-side analysts expect Newell Brands's EPS to be near $0.43 on sales of $2.44 billion. Newell Brands reported a profit of $0.73 per share when it published results during the same quarter last year. Sales in that period totaled $2.45 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 match the consensus estimate, earnings would be down 41.1%. Sales would have fallen 0.45% from the same quarter last year. 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 0.18 0.05 0.39 0.56
EPS Actual 0.30 0.09 0.42 0.73
Revenue Estimate 2.03 B 1.91 B 2.58 B 2.44 B
Revenue Actual 2.11 B 1.89 B 2.62 B 2.45 B

Stock Performance

Shares of Newell Brands were trading at $16.66 as of October 28. Over the last 52-week period, shares are down 18.54%. Given that these returns are generally negative, long-term shareholders are probably down going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Newell Brands is scheduled to hold the call at 10:00:00 ET and can be accessed here.

 

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Posted-In: Earnings