Market Overview

Preview: Gap's Earnings

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Gap (NYSE: GPS) releases its next round of earnings this Tuesday, November 24. Get the latest predictions in Benzinga's essential guide to the company's Q3 earnings report.

Net Income, Earnings, And Earnings Per Share

Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.

Earnings And Revenue

Gap earnings will be near $0.31 per share on sales of $3.82 billion, according to analysts. In the same quarter last year, Gap reported EPS of $0.53 on revenue of $4.00 billion.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

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.

The Wall Street consensus estimate for earnings would represent a 41.51% decrease for the company. Revenue would have fallen 4.45% from the same quarter last year. The company'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 -0.41 -0.41 0.41 0.51
EPS Actual -0.01 -2.51 0.58 0.53
Revenue Estimate 2.91 B 2.57 B 4.55 B 3.96 B
Revenue Actual 3.27 B 2.11 B 4.67 B 4.00 B

Stock Performance

Shares of Gap were trading at $24.38 as of November 20. Over the last 52-week period, shares are up 51.82%. Given that these returns are generally positive, long-term shareholders are probably content going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Gap is scheduled to hold the call at 17:00:00 ET and can be accessed here.

 

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Posted-In: Earnings