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A Preview Of Prudential Financial's Earnings

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Prudential Financial (NYSE:PRU) unveils its next round of earnings this Thursday, February 04. Here is Benzinga's everything-that-matters guide for the earnings announcement.

Net Income, Earnings, 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

Sell-side analysts expect Prudential Financial's EPS to be near $2.57 on sales of $14.99 billion. In the same quarter last year, Prudential Financial reported EPS of $2.33 on revenue of $17.45 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.

If the company were to match the consensus estimate when it reports Thursday, earnings would be up 10.3%. Sales would be down 14.1% from the same quarter last year. The company's reported EPS has stacked up against analyst estimates in the past like this:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020
EPS Estimate 2.72 1.71 2.77 2.02
EPS Actual 3.21 1.85 2.32 2.33
Revenue Estimate 13.68 B 12.63 B 13.92 B 15.22 B
Revenue Actual 13.34 B 13.08 B 13.33 B 17.45 B

Stock Performance

Shares of Prudential Financial were trading at $80.18 as of February 02. Over the last 52-week period, shares are down 15.96%. 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. Prudential Financial is scheduled to hold the call at 11:00:00 ET and can be accessed here.

 

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Posted-In: BZI-EPEarnings