Benzinga | Jan 22, 2021 10:18AM EST

Graco Earnings Preview

Graco (NYSE:GGG) announces its next round of earnings this Monday, January 25. Here is Benzinga's look at Graco's Q4 earnings report.

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

Sell-side analysts expect Graco's EPS to be near $0.51 on sales of $426.21 million. Graco reported a profit of $0.48 per share when it published results during the same quarter last year. Sales in that period totaled $412.29 million.

Why Analyst Estimates And Earnings Surprises Are Important

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

If the company were to match the consensus estimate when it reports Monday, earnings would be up 6.25%. Sales would be up 3.38% 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 2020EPS Estimate 0.42 0.26 0.44 0.39EPS Actual 0.59 0.37 0.38 0.48Revenue Estimate 385.41 M 325.04 M 391.35 M 392.62 MRevenue Actual 439.32 M 366.89 M 373.57 M 412.29 M

Stock Performance

Shares of Graco were trading at $76.19 as of January 21. Over the last 52-week period, shares are up 47.98%. Given that these returns are generally positive, long-term shareholders should be satisfied going into this earnings release.

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