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Market Overview

Earnings Preview for Encompass Health


Encompass Health (NYSE:EHC) will be releasing its next round of earnings this Tuesday, January 26. For all of the relevant information, here is your guide for Tuesday's Q4 earnings announcement.

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

Wall Street analysts see Encompass Health reporting earnings of $0.85 per share on sales of $1.21 billion. In the same quarter last year, Encompass Health reported earnings per share of $0.85 on sales of $1.18 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 Wall Street consensus estimate for earnings would represent no change for the company. Sales would be up 2.2% from the year-ago period. Here is how the Encompass Health's reported EPS has stacked up against analyst estimates in the past:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020
EPS Estimate 0.75 0.51 0.86 0.84
EPS Actual 0.78 0.31 0.87 0.85
Revenue Estimate 1.18 B 1.08 B 1.20 B 1.18 B
Revenue Actual 1.17 B 1.07 B 1.18 B 1.18 B

Stock Performance

For a full 12 months, the return has risen by 11.62%. 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. Encompass Health is scheduled to hold the call at 09:00:00 ET and can be accessed here.


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Posted-In: BZI-EPEarnings