CVS Health's Earnings: A Preview

CVS Health CVS unveils its next round of earnings this Tuesday, February 16. 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

CVS Health earnings will be near $1.24 per share on sales of $68.75 billion, according to analysts. In the same quarter last year, CVS Health reported EPS of $1.73 on revenue of $66.89 billion.

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.

If the company were to match the consensus estimate when it reports Tuesday, earnings would be down 28.32%. Sales would be have grown 2.78% from the same quarter last year. Here is how the company's EPS has stacked up against analyst estimates in the past:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020
EPS Estimate 1.33 1.92 1.63 1.68
EPS Actual 1.66 2.64 1.91 1.73
Revenue Estimate 66.58 B 64.18 B 64.06 B 63.97 B
Revenue Actual 67.06 B 65.34 B 66.75 B 66.89 B

Stock Performance

For a full 12 months, the return has risen by 3.07%. 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. CVS Health is scheduled to hold the call at 08:00:00 ET and can be accessed here.

Posted In: BZI-EPEarnings