On Tuesday, July 20, GATX (NYSE:GATX) 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
GATX EPS will likely be near $1.02 while revenue will be around $312.75 million, according to analysts. GATX EPS in the same period a year ago totaled $1.05. Sales were $300.50 million.
What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?
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.
The analyst consensus estimate would represent a 2.86% decrease in the company’s earnings. Revenue would be up 4.08% on a year-over-year basis. Here is how the company’s reported EPS has compared to analyst estimates in the past:
| Quarter | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 |
|---|---|---|---|---|
| EPS Estimate | 0.85 | 0.88 | 0.92 | 0.94 |
| EPS Actual | 1.02 | 0.50 | 1.36 | 1.05 |
| Revenue Estimate | 303.17 M | 301.53 M | 293.50 M | 331.40 M |
| Revenue Actual | 305.80 M | 304.90 M | 304.40 M | 300.50 M |
Stock Performance
Over the last 52-week period, shares are up 39.91%. Given that these returns are generally positive, long-term shareholders can relax 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. GATX is scheduled to hold the call at 11:00:00 ET and can be accessed here.
