Benzinga | Oct 26, 2020 10:09AM EDT

Earnings Preview: ONEOK

On Tuesday, October 27, ONEOK (NYSE: OKE) will release its latest earnings report. Benzinga's report can help you figure out the ins and outs of the earnings release.

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

Sell-side analysts expect ONEOK's EPS to be near $0.58 on sales of $2.58 billion. In the same quarter last year, ONEOK announced EPS of $0.74 on revenue of $2.26 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 Wall Street estimate would represent a 21.62% decline in the company's earnings. Sales would be up 14.01% from the year-ago period. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019EPS Estimate 0.54 0.82 0.77 0.74EPS Actual 0.32 0.83 0.77 0.74Revenue Estimate 2.30 B 2.98 B 2.72 B 2.79 BRevenue Actual 3.02 B 2.14 B 2.66 B 2.26 B

Stock Performance

Shares of ONEOK were trading at $30.56 as of October 23. Over the last 52-week period, shares are down 58.57%. Given that these returns are generally negative, long-term shareholders are probably unhappy going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. ONEOK is scheduled to hold the call at 11:00:00 ET and can be accessed here.