Preferred Bank's Earnings: A Preview

On Tuesday, July 20, Preferred Bank PFBC will release its latest earnings report. Check out Benzinga's preview to understand the implications.

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

Preferred Bank EPS will likely be near $1.45 while revenue will be around $46.72 million, according to analysts. Preferred Bank reported a profit of $1.03 per share when it published results during the same quarter last year. Sales in that period totaled $42.18 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 analyst consensus estimate would represent a 40.78% increase in the company's earnings. Sales would be up 10.76% from the year-ago period. Here is how the company's EPS has stacked up against analyst estimates in the past:

Stock Performance

For a full 12 months, the return has risen by 37.98%. 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. Preferred Bank is scheduled to hold the call at 14:00:00 ET and can be accessed here.