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Market Overview

Earnings Outlook For Facebook

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Facebook (NASDAQ:FB) announces its next round of earnings this Wednesday, January 27. Here is Benzinga's look at Facebook's Q4 earnings report.

Net Income, Earnings, 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

Wall Street analysts see Facebook reporting earnings of $3.21 per share on sales of $26.41 billion. In the same quarter last year, Facebook reported EPS of $2.56 on revenue of $21.08 billion.

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.

The Wall Street consensus estimate for earnings would represent a 25.39% increase for the company. Revenue would be have grown 25.27% from the same quarter last year. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020
EPS Estimate 1.91 1.39 1.74 2.53
EPS Actual 2.40 1.80 1.71 2.56
Revenue Estimate 19.82 B 17.40 B 17.48 B 20.88 B
Revenue Actual 21.47 B 18.69 B 17.74 B 21.08 B

Stock Performance

Shares of Facebook were trading at $278.01 as of January 25. Over the last 52-week period, shares are up 24.98%. Given that these returns are generally positive, long-term shareholders can be satisfied going into this earnings release.

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

 

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Posted-In: BZI-EPEarnings Tech