A Preview Of Redhill Biopharma's Earnings

Redhill Biopharma RDHL releases its next round of earnings this Thursday, November 12. Get the latest predictions in Benzinga's essential guide to the company's Q3 earnings report.

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 are expecting Redhill Biopharma's loss per share to be near $0.16 on sales of $25.37 million. Redhill Biopharma EPS in the same period a year ago totaled $0.03. Sales were $1.40 million.

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 analyst consensus estimate would represent a 433.33% decrease in the company's earnings. Sales would be up 1710.85% from the same quarter last year. The company's reported EPS has stacked up against analyst estimates in the past like this:

Stock Performance

Shares of Redhill Biopharma were trading at $8.2 as of November 10. Over the last 52-week period, shares are up 35.31%. Given that these returns are generally positive, long-term shareholders are probably happy going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Redhill Biopharma is scheduled to hold the call at 08:30:00 ET and can be accessed here.