Benzinga | Jan 22, 2021 10:16AM EST

A Preview Of Brown & Brown's Earnings

Brown & Brown (NYSE:BRO) announces its next round of earnings this Monday, January 25. Here is Benzinga's everything-that-matters guide for this Monday's Q4 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

Analysts expect Brown & Brown earnings of $0.29 per share. Revenue will likely be around $622.72 million, according to the consensus estimate. Brown & Brown reported a per-share profit of $0.28 when it published results during the same quarter last year. Sales in that period totaled $579.00 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 3.57% increase in the company's earnings. Sales would be up 7.55% on a year-over-year basis. 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 2020EPS Estimate 0.43 0.28 0.46 0.26EPS Actual 0.52 0.34 0.51 0.28Revenue Estimate 640.89 M 571.78 M 681.74 M 563.56 MRevenue Actual 674.00 M 598.80 M 698.50 M 579.00 M

Stock Performance

For a full 12 months, the return has risen by 14.04%. Given that these returns are generally positive, long-term shareholders are probably relaxed 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. Brown & Brown is scheduled to hold the call at 08:00:00 ET and can be accessed here.