Market Overview

L Brands's Earnings: A Preview

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On Wednesday, November 18, L Brands (NYSE: LB) will release its latest earnings report. Here is Benzinga's outlook for the company.

Net Income, Earnings, 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

Analysts expect L Brands earnings of $0.06 per share. Revenue will likely be around $2.65 billion, according to the consensus estimate. In the same quarter last year, L Brands announced EPS of $0.02 on revenue of $2.68 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 analyst consensus estimate would represent a 200.0% increase in the company's EPS figure. Revenue would have fallen 1.01% from the same quarter last year. L Brands's reported EPS has stacked up against analyst estimates in the past like this:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019
EPS Estimate -0.42 -0.66 1.83 0.02
EPS Actual 0.25 -0.99 1.88 0.02
Revenue Estimate 2.21 B 1.82 B 4.66 B 2.69 B
Revenue Actual 2.32 B 1.65 B 4.71 B 2.68 B

Stock Performance

Shares of L Brands were trading at $34.76 as of November 16. Over the last 52-week period, shares are up 121.04%. 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. L Brands is scheduled to hold the call at 09:00:00 ET and can be accessed here.

 

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Posted-In: Earnings