Best Buy Co's Earnings: A Preview

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On Thursday, May 27, Best Buy Co BBY 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 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 management's projections, Best Buy Co analysts model for earnings of $1.35 per share on sales of $10.30 billion. In the same quarter last year, Best Buy Co announced EPS of $0.67 on revenue of $8.56 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.

If the company were to match the consensus estimate, earnings would be up 101.49%. Revenue would be up 20.3% from the year-ago period. Best Buy Co'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 3.45 1.70 1.08 0.60
EPS Actual 3.48 2.06 1.71 0.67
Revenue Estimate 17.23 B 11.00 B 9.71 B 8.35 B
Revenue Actual 16.94 B 11.85 B 9.91 B 8.56 B

Stock Performance

Shares of Best Buy Co were trading at $114.42 as of May 25. Over the last 52-week period, shares are up 53.38%. 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. Best Buy Co is scheduled to hold the call at 08:00:00 ET and can be accessed here.

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