Ellington Residential's Earnings: A Preview

Ellington Residential EARN announces its next round of earnings this Tuesday, February 16. Here is Benzinga's everything-that-matters guide for this Tuesday's Q4 earnings announcement.

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

Wall Street analysts see Ellington Residential reporting earnings of $0.35 per share on revenue of $5.86 million. Ellington Residential reported a profit of $0.23 per share when it published results during the same quarter last year. Sales in that period totaled $1.37 million.

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, EPS would be up 52.17%. Revenue would be up 327.74% from the year-ago period. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Stock Performance

Over the last 52-week period, shares are up 4.79%. Given that these returns are generally positive, long-term shareholders can be content going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Ellington Residential is scheduled to hold the call at 11:00:00 ET and can be accessed here.