Benzinga | Nov 23, 2020 10:17AM EST

Earnings Preview: Analog Devices

Analog Devices (NASDAQ: ADI) unveils its next round of earnings this Tuesday, November 24. Here is Benzinga's everything-that-matters guide for the earnings announcement.

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

Analog Devices earnings will be near $1.32 per share on sales of $1.44 billion, according to analysts. In the same quarter last year, Analog Devices posted EPS of $1.19 on sales of $1.44 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 10.92% increase in the company's earnings. Revenue would be down 0.21% on a year-over-year basis. Here is how the Analog Devices's reported EPS has stacked up against analyst estimates in the past:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2019EPS Estimate 1.28 1.04 1 1.22EPS Actual 1.36 1.08 1.03 1.19Revenue Estimate 1.43 B 1.33 B 1.30 B 1.45 BRevenue Actual 1.46 B 1.32 B 1.30 B 1.44 B

Stock Performance

Shares of Analog Devices were trading at $134.88 as of November 20. Over the last 52-week period, shares are up 18.6%. Given that these returns are generally positive, long-term shareholders should be content going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Analog Devices is scheduled to hold the call at 10:00:00 ET and can be accessed here.