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Market Overview

Earnings Preview: Prudential Financial

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On Tuesday, November 03, Prudential Financial (NYSE: PRU) 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

Prudential Financial EPS is expected to be around $2.7, according to sell-side analysts. Sales will likely be near $13.68 billion. In the same quarter last year, Prudential Financial announced EPS of $3.22 on revenue of $12.93 billion.

Why Analyst Estimates And Earnings Surprises Are Important

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.

The Wall Street consensus estimate for earnings would represent a 16.15% decrease for the company. Revenue would be have grown 5.82% from the same quarter last year. Here is how the company's reported EPS has compared to analyst estimates in the past:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019
EPS Estimate 1.71 2.77 2.02 3.06
EPS Actual 1.85 2.32 2.33 3.22
Revenue Estimate 12.63 B 13.92 B 15.22 B 14.24 B
Revenue Actual 13.08 B 13.33 B 17.45 B 12.93 B

Stock Performance

Shares of Prudential Financial were trading at $64.01 as of October 29. Over the last 52-week period, shares are down 29.78%. Given that these returns are generally negative, long-term shareholders are probably upset going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Prudential Financial is scheduled to hold the call at 11:00:00 ET and can be accessed here.

 

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Posted-In: Earnings