Proassurance's Earnings: A Preview

On Monday, February 22, Proassurance PRA will release its latest earnings report. Decipher the announcement with Benzinga's help.

Net Income, Earnings, 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

Analysts covering Proassurance modeled for quarterly EPS of $0.01 on revenue of $184.46 million. In the same quarter last year, Proassurance reported EPS of $1.27 on revenue of $214.45 million.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

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 report earnings in line when it publishes results Monday, quarterly profit would be up 100.79%. Sales would be down 13.98% from the year-ago period. Here is how the company's EPS has stacked up against analyst estimates in the past:

Stock Performance

Shares of Proassurance were trading at $23.56 as of February 18. Over the last 52-week period, shares are down 25.69%. 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. Proassurance is scheduled to hold the call at 10:00:00 ET and can be accessed here.