Preview: AT&T's Earnings

AT&T T announces its next round of earnings this Wednesday, January 27. Here is Benzinga's everything-that-matters guide for this Wednesday'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

Analysts expect AT&T earnings of $0.73 per share. Revenue will likely be around $44.55 billion, according to the consensus estimate. AT&T EPS in the same period a year ago totaled $0.89. Revenue was $46.82 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 17.98% decrease for the company. Sales would be down 4.85% from the year-ago period. Here is how the AT&T's reported EPS has stacked up against analyst estimates in the past:

Stock Performance

Shares of AT&T were trading at $29.11 as of January 25. Over the last 52-week period, shares are down 20.89%. Given that these returns are generally negative, long-term shareholders are probably down going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. AT&T is scheduled to hold the call at 08:30:00 ET and can be accessed here.