Market Overview

Preview: Pinnacle West Capital's Earnings

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On Friday, October 30, Pinnacle West Capital (NYSE: PNW) will release its latest earnings report. Here is Benzinga's outlook for the company.

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

Based on Pinnacle West Capital management projections, analysts predict EPS of $2.85 on revenue of $1.22 billion. In the same quarter last year, Pinnacle West Capital reported EPS of $2.77 on revenue of $1.19 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.

If the company were to report earnings in line when it publishes results Friday, earnings would be up 2.89%. Revenue would be up 2.43% 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 1.45 0.15 0.46 2.99
EPS Actual 1.71 0.27 0.57 2.77
Revenue Estimate 907.02 M 749.63 M 772.22 M 1.26 B
Revenue Actual 929.59 M 661.93 M 670.39 M 1.19 B

Stock Performance

Shares of Pinnacle West Capital were trading at $82.77 as of October 28. Over the last 52-week period, shares are down 13.1%. Given that these returns are generally negative, long-term shareholders are likely a little upset going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Pinnacle West Capital is scheduled to hold the call at 12:00:00 ET and can be accessed here.

 

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Posted-In: Earnings