Nike Earnings Preview

Nike (NYSE:NKE) announces its next round of earnings this Friday, December 18. Here is Benzinga's look at Nike's Q2 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

Based on Nike management projections, analysts predict EPS of $0.61 on revenue of $10.54 billion. Nike EPS in the same period a year ago totaled $0.7. Revenue was $10.33 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.

The Wall Street consensus estimate for earnings would represent a 12.86% decrease for the company. Sales would be up 2.07% from the year-ago period. Here is how the company's reported EPS has compared to analyst estimates in the past:

Stock Performance

Over the last 52-week period, shares are up 39.32%. Given that these returns are generally positive, long-term shareholders can be content going into this earnings release.

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