Verizon Communications (NYSE:VZ) will be releasing its next round of earnings this Wednesday, July 21. For all of the relevant information, here is your guide for Wednesday’s Q2 earnings announcement.
Net Income, Earnings, 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 analysts see Verizon Communications reporting earnings of $1.29 per share on sales of $32.68 billion. In the same quarter last year, Verizon Communications announced EPS of $1.18 on revenue of $30.40 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 when it reports Wednesday, EPS would be up 9.32%. Sales would be up 7.5% on a year-over-year basis. Here is how the company’s EPS has stacked up against analyst estimates in the past:
| Quarter | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 |
|---|---|---|---|---|
| EPS Estimate | 1.29 | 1.17 | 1.22 | 1.15 |
| EPS Actual | 1.31 | 1.21 | 1.25 | 1.18 |
| Revenue Estimate | 32.46 B | 34.43 B | 31.59 B | 29.93 B |
| Revenue Actual | 32.87 B | 34.69 B | 31.54 B | 30.40 B |
Stock Performance
Shares of Verizon Communications were trading at $55.84 as of July 19. Over the last 52-week period, shares are up 1.51%. 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. Verizon Communications is scheduled to hold the call at 08:30:00 ET and can be accessed here.
