Benzinga | Nov 2, 2020 10:09AM EST

Earnings Preview: Brookfield Business

Brookfield Business (NYSE: BBU) announces its next round of earnings this Tuesday, November 03. Here is Benzinga's everything-that-matters guide for this Tuesday's Q3 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

Brookfield Business EPS will likely be near $0.92 while revenue will be around $11.19 billion, according to analysts. Brookfield Business EPS in the same period a year ago totaled $0.16. Revenue was $11.79 billion.

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.

If the company were to report earnings in line when it publishes results Tuesday, earnings would be up 475.0%. Revenue would be down 5.12% on a year-over-year basis. Here is how the company's EPS has stacked up against analyst estimates in the past:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019EPS Estimate 0.85 0.59 0.69 0.21EPS Actual 1.15 1.29 0.58 0.16Revenue Estimate 10.18 B 12.19 B 12.58 B 11.87 BRevenue Actual 7.37 B 10.15 B 11.32 B 11.79 B

Stock Performance

Shares of Brookfield Business were trading at $29.14 as of October 29. Over the last 52-week period, shares are down 26.76%. 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. Brookfield Business is scheduled to hold the call at 09:00:00 ET and can be accessed here.