Benzinga | Nov 11, 2020 10:14AM EST

Earnings Outlook for Applied Materials

Applied Materials (NASDAQ: AMAT) will be releasing its next round of earnings this Thursday, November 12. For all of the relevant information, here is your guide for Thursday's Q4 earnings announcement.

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 $1.17 and sales around $4.60 billion. Applied Materials earnings in the same period a year ago was $0.8 per share. Quarterly sales came in at $3.75 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.

If the company were to post earnings in line with the consensus estimate when it reports Thursday, EPS would be up 46.25%. Sales would be up 22.54% from the same quarter last year. In comparison to analyst estimates in the past, here is how the company's reported EPS stacks up:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2019EPS Estimate 0.95 0.95 0.92 0.76EPS Actual 1.06 0.89 0.98 0.80Revenue Estimate 4.18 B 4.15 B 4.10 B 3.68 BRevenue Actual 4.39 B 3.96 B 4.16 B 3.75 B

Stock Performance

Shares of Applied Materials were trading at $69.39 as of November 10. Over the last 52-week period, shares are up 23.82%. Given that these returns are generally positive, long-term shareholders are probably satisfied going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Applied Materials is scheduled to hold the call at 16:30:00 ET and can be accessed here.