Earnings Preview for America's Car-Mart

On Monday, November 16, America's Car-Mart CRMT will report its last quarter's earnings. Here is Benzinga's preview of the company's release.

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

Wall Street expects EPS of $2.29 and sales around $205.99 million. America's Car-Mart reported a profit of $2.0 per share when it published results during the same quarter last year. Sales in that period totaled $190.31 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 Monday, earnings would be up 14.5%. Sales would be up 8.24% from the year-ago period. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Stock Performance

Shares of America's Car-Mart were trading at $94.72 as of November 12. Over the last 52-week period, shares are up 6.1%. 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. America's Car-Mart is scheduled to hold the call at 11:00:00 ET and can be accessed here.