Preview: GDS Holdings's Earnings

GDS Holdings GDS will be releasing its next round of earnings this Wednesday, March 10. For all of the relevant information, here is your guide for Wednesday'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

Based on GDS Holdings management projections, analysts predict EPS of $0.16 on revenue of $252.41 million. GDS Holdings EPS in the same period a year ago totaled $0.12. Sales were $169.38 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 Wall Street estimate would represent a 33.33% decline in the company's earnings. Sales would be up 49.02% on a year-over-year basis. GDS Holdings's reported EPS has stacked up against analyst estimates in the past like this:

Stock Performance

Shares of GDS Holdings were trading at $84.5 as of March 08. Over the last 52-week period, shares are up 52.98%. Given that these returns are generally positive, long-term shareholders are probably happy going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. GDS Holdings is scheduled to hold the call at 19:00:00 ET and can be accessed here.