A Preview Of Ferrari's Earnings

Ferrari RACE announces its next round of earnings this Tuesday, February 02. Here is Benzinga's look at Ferrari's Q4 earnings report.

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 Ferrari management projections, analysts predict EPS of $1.27 on revenue of $1.26 billion. In the same quarter last year, Ferrari reported EPS of $1.01 on revenue of $1.04 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.

If the company were to match the consensus estimate when it reports Tuesday, earnings would be up 25.74%. Sales would be up 21.39% on a year-over-year basis. Ferrari's reported EPS has stacked up against analyst estimates in the past like this:

Stock Performance

Shares of Ferrari were trading at $208.18 as of January 29. Over the last 52-week period, shares are up 26.1%. Given that these returns are generally positive, long-term shareholders are probably content going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Ferrari is scheduled to hold the call at 09:00:00 ET and can be accessed here.