Benzinga | Dec 16, 2020 10:04AM EST

Earnings Outlook for Sanderson Farms

On Thursday, December 17, Sanderson Farms (NASDAQ:SAFM) will release its latest earnings report. Check out Benzinga's preview to understand the implications.

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

Analysts predict Sanderson Farms will report earnings of $0.12 per share on revenue of $900.09 million. In the same quarter last year, Sanderson Farms reported EPS of $0.95 on revenue of $906.49 million.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

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 112.63% increase in the company's earnings. Revenue would be down 0.71% on a year-over-year basis. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2019EPS Estimate 0.95 0.19 -0.86 -1EPS Actual 1.48 0.28 -1.76 -0.95Revenue Estimate 936.04 M 890.61 M 801.10 M 891.00 MRevenue Actual 956.46 M 844.71 M 823.08 M 906.49 M

Stock Performance

Shares of Sanderson Farms were trading at $141.76 as of December 15. Over the last 52-week period, shares are down 18.49%. 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. Sanderson Farms is scheduled to hold the call at 11:00:00 ET and can be accessed here.