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Market Overview

Gap Earnings Preview

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Gap (NYSE:GPS) announces its next round of earnings this Thursday, March 04. Here is Benzinga's everything-that-matters guide for this Thursday's Q4 earnings announcement.

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 Gap modeled for quarterly EPS of $0.17 on revenue of $4.66 billion. Gap EPS in the same period a year ago totaled $0.58. Sales were $4.67 billion.

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 report earnings in line when it publishes results Thursday, quarterly profit would be down 70.69%. Revenue would have fallen 0.3% from the same quarter last year. Here is how the Gap's reported EPS has stacked up against analyst estimates in the past:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020
EPS Estimate 0.32 -0.41 -0.41 0.41
EPS Actual 0.25 -0.01 -2.51 0.58
Revenue Estimate 3.82 B 2.91 B 2.57 B 4.55 B
Revenue Actual 3.99 B 3.27 B 2.11 B 4.67 B

Stock Performance

Shares of Gap were trading at $25.71 as of March 02. Over the last 52-week period, shares are up 91.77%. Given that these returns are generally positive, long-term shareholders should be satisfied going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Gap is scheduled to hold the call at 17:00:00 ET and can be accessed here.

 

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Posted-In: BZI-EPEarnings