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Market Overview

Preview: New Relic's Earnings

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On Thursday, May 13, New Relic (NYSE:NEWR) will release its latest earnings report. Decipher the announcement with Benzinga's help.

Net Income, Earnings, 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

Sell-side analysts are expecting New Relic's loss per share to be near $0.45 on sales of $167.05 million. New Relic reported a per-share profit of $0.14 when it published results during the same quarter last year. Sales in that period totaled $159.66 million.

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.

If the company were to report earnings in line when it publishes results Thursday, quarterly profit would be down 421.43%. Revenue would be have grown 4.63% from the same quarter last year. New Relic's reported EPS has stacked up against analyst estimates in the past like this:

Quarter Q3 2021 Q2 2020 Q1 2020 Q4 2020
EPS Estimate -0.14 0.01 0.03 0.03
EPS Actual -0.14 -0.07 0.15 0.14
Revenue Estimate 165.09 M 163.42 M 159.40 M 153.48 M
Revenue Actual 166.34 M 166.05 M 162.59 M 159.66 M

eps graph

Stock Performance

Shares of New Relic were trading at $59.06 as of May 11. Over the last 52-week period, shares are up 0.11%. Given that these returns are generally positive, long-term shareholders can be satisfied going into this earnings release.

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

 

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Posted-In: BZI-EPEarnings