Benzinga | Jan 26, 2021 10:12AM EST

A Preview Of Nasdaq's Earnings

Nasdaq (NASDAQ:NDAQ) announces its next round of earnings this Wednesday, January 27. Here is Benzinga's everything-that-matters guide for this Wednesday's Q4 earnings announcement.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

Wall Street expects EPS of $1.45 and sales around $748.98 million. Nasdaq reported a profit of $1.29 per share when it published results during the same quarter last year. Sales in that period totaled $646.00 million.

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

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 report earnings in line when it publishes results Wednesday, quarterly profit would be up 12.4%. Sales would be up 15.94% from the same quarter last year. Here is how the Nasdaq's reported EPS has stacked up against analyst estimates in the past:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020EPS Estimate 1.45 1.44 1.46 1.27EPS Actual 1.53 1.54 1.50 1.29Revenue Estimate 688.02 M 681.97 M 692.12 M 641.06 MRevenue Actual 715.00 M 699.00 M 701.00 M 646.00 M

Stock Performance

Over the last 52-week period, shares are up 23.89%. Given that these returns are generally positive, long-term shareholders can relax 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. Nasdaq is scheduled to hold the call at 08:00:00 ET and can be accessed here.