A.O. Smith Earnings Preview

On Thursday, January 28, A.O. Smith AOS will release its latest earnings report. Decipher the announcement with Benzinga's help.

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 A.O. Smith management projections, analysts predict EPS of $0.58 on revenue of $769.03 million. In the same quarter last year, A.O. Smith reported earnings per share of $0.56 on revenue of $750.90 million.

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

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 analyst consensus estimate would represent a 3.57% increase in the company's earnings. Revenue would be up 2.41% on a year-over-year basis. 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 0.52 0.42 0.34 0.59
EPS Actual 0.66 0.45 0.32 0.56
Revenue Estimate 715.58 M 661.22 M 640.12 M 776.04 M
Revenue Actual 760.00 M 663.90 M 636.90 M 750.90 M

Stock Performance

Shares of A.O. Smith were trading at $54.5 as of January 26. Over the last 52-week period, shares are up 21.39%. Given that these returns are generally positive, long-term shareholders should be content going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. A.O. Smith is scheduled to hold the call at 10:00:00 ET and can be accessed here.

Posted In: BZI-EPEarnings