Preview: Guidewire Software's Earnings

On Thursday, March 04, Guidewire Software GWRE will release its latest earnings report. Check out Benzinga's preview to understand the implications.

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

Based on management's projections, Guidewire Software analysts modeled for a loss of $0.01 per share on sales of $170.29 million. Guidewire Software reported a profit of $0.21 per share when it published results during the same quarter last year. Sales in that period totaled $173.46 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.

The analyst consensus estimate would represent a 104.76% decrease in the company's earnings. Sales would be down 1.83% on a year-over-year basis. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Stock Performance

Shares of Guidewire Software were trading at $114.57 as of March 02. Over the last 52-week period, shares are up 20.12%. Given that these returns are generally positive, long-term shareholders are probably content going into this earnings release.

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