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Preview: Lennar's Earnings

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On Tuesday, March 16, Lennar (NYSE:LEN) will release its latest earnings report. Here is Benzinga's outlook for the company.

What Are Earnings, Net Income, 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 Lennar management projections, analysts predict EPS of $1.71 on revenue of $5.13 billion. In the same quarter last year, Lennar posted EPS of $1.27 on sales of $4.50 billion.

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.

The analyst consensus estimate would represent a 34.65% increase in the company's earnings. Sales would be up 13.87% from the same quarter last year. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Quarter Q4 2020 Q3 2020 Q2 2020 Q1 2020
EPS Estimate 2.37 1.55 1.07 0.84
EPS Actual 2.82 2.12 1.65 1.27
Revenue Estimate 6.65 B 5.47 B 4.93 B 4.16 B
Revenue Actual 6.83 B 5.87 B 5.29 B 4.50 B

Stock Performance

For a full 12 months, the return has risen by 151.62%. Given that these returns are generally positive, long-term shareholders are probably relaxed going into this earnings release. Long-term shareholders are already enjoying 12-month gains prior to the announcement.

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

 

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Posted-In: BZI-EPEarnings