Earnings Preview: Altra Industrial Motion

Altra Industrial Motion AIMC announces its next round of earnings this Friday, February 12. Here is Benzinga's everything-that-matters guide for this Friday's Q4 earnings announcement.

What Are Earnings, Net Income, 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

Based on management's projections, Altra Industrial Motion analysts model for earnings of $0.69 per share on sales of $431.76 million. In the same quarter last year, Altra Industrial Motion reported EPS of $0.66 on revenue of $441.90 million.

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.

The Wall Street estimate would represent a 4.55% increase in the company's earnings. Revenue would be down 2.29% on a year-over-year basis. Here is how the Altra Industrial Motion's reported EPS has stacked up against analyst estimates in the past:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020
EPS Estimate 0.46 0.31 0.47 0.64
EPS Actual 0.87 0.60 0.65 0.66
Revenue Estimate 393.82 M 365.18 M 406.19 M 440.80 M
Revenue Actual 437.80 M 400.80 M 434.20 M 441.90 M

Stock Performance

For a full 12 months, the return has risen by 55.59%. Given that these returns are generally positive, long-term shareholders are probably relaxed going into this earnings release. Long-term shareholders are already enjoying 12-month gains prior to the announcement.

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

Posted In: BZI-EPEarnings