Baker Hughes (NYSE:BKR) releases its next round of earnings this Wednesday, July 21. Get the latest predictions in Benzinga’s essential guide to the company’s Q2 earnings report.
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
Wall Street expects EPS of $0.16 and sales around $4.95 billion. In the same quarter last year, Baker Hughes posted EPS of $0.05 on sales of $4.74 billion.
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 420.0% increase in the company’s EPS figure. Revenue would be up 4.52% from the year-ago period. Here is how the Baker Hughes’s reported EPS has stacked up against analyst estimates in the past:
| Quarter | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 |
|---|---|---|---|---|
| EPS Estimate | 0.11 | 0.17 | 0.04 | 0 |
| EPS Actual | 0.12 | -0.07 | 0.04 | -0.05 |
| Revenue Estimate | 4.80 B | 5.42 B | 4.78 B | 4.80 B |
| Revenue Actual | 4.78 B | 5.50 B | 5.05 B | 4.74 B |
Stock Performance
Shares of Baker Hughes were trading at $19.65 as of July 19. Over the last 52-week period, shares are up 18.56%. 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. Baker Hughes is scheduled to hold the call at 08:30:00 ET and can be accessed here.
