Earnings Outlook For Costco Wholesale

Costco Wholesale COST announces its next round of earnings this Thursday, December 10. Here is Benzinga's everything-that-matters guide for this Thursday's Q1 earnings announcement.

What Are Earnings, Net Income, 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

Based on management's projections, Costco Wholesale analysts model for earnings of $2.0 per share on sales of $41.70 billion. In the same quarter last year, Costco Wholesale reported earnings per share of $1.73 on revenue of $37.04 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 match the consensus estimate when it reports Thursday, earnings would be up 15.61%. Sales would be up 12.58% from the same quarter last year. Here is how the company's reported EPS has compared to analyst estimates in the past:

Stock Performance

For a full 12 months, the return has risen by 27.36%. Given that these returns are generally positive, long-term shareholders are probably relaxed going into this earnings release. Long-term shareholders are already enjoying 12-month gains prior to the announcement.

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