Preferred Bank's Earnings: A Preview

Preferred Bank PFBC unveils its next round of earnings this Monday, January 25. Here is Benzinga's everything-that-matters guide for the 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

Sell-side analysts expect Preferred Bank's EPS to be near $1.16 on sales of $44.37 million. Preferred Bank reported a per-share profit of $1.31 when it published results during the same quarter last year. Sales in that period totaled $40.41 million.

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

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.

If the company were to match the consensus estimate when it reports Monday, earnings would be down 11.45%. Revenue would be up 9.8% on a year-over-year basis. In comparison to analyst estimates in the past, here is how the company's reported EPS stacks up:

Stock Performance

Shares of Preferred Bank were trading at $49.95 as of January 21. Over the last 52-week period, shares are down 19.58%. Given that these returns are generally negative, long-term shareholders are probably unhappy going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Preferred Bank is scheduled to hold the call at 14:00:00 ET and can be accessed here.