On Wednesday, April 21, Lithia Motors LAD will release its latest earnings report. Check out Benzinga's preview to understand the implications.
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 Lithia Motors management projections, analysts predict EPS of $4.74 on revenue of $3.88 billion. Lithia Motors earnings in the same period a year ago was $2.01 per share. Quarterly sales came in at $2.80 billion.
Why Analyst Estimates And Earnings Surprises Are Important
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 135.82% increase in the company's earnings. Sales would be have grown 38.37% from the same quarter last year. Lithia Motors's reported EPS has stacked up against analyst estimates in the past like this:
| Quarter | Q4 2021 | Q3 2020 | Q2 2020 | Q1 2020 |
|---|---|---|---|---|
| EPS Estimate | 5.06 | 5.86 | 1.54 | 2.05 |
| EPS Actual | 5.46 | 6.89 | 3.72 | 2.01 |
| Revenue Estimate | 3.93 B | 3.57 B | 2.42 B | 2.93 B |
| Revenue Actual | 3.94 B | 3.62 B | 2.76 B | 2.80 B |
Stock Performance
Shares of Lithia Motors were trading at $387.52 as of April 19. Over the last 52-week period, shares are up 305.83%. 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. Lithia Motors is scheduled to hold the call at 10:00:00 ET and can be accessed here.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Date | ticker | name | Actual EPS | EPS Surprise | Actual Rev | Rev Surprise |
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