Benzinga | Jan 26, 2021 10:13AM EST

A Preview Of Progressive's Earnings

On Wednesday, January 27, Progressive (NYSE:PGR) will release its latest earnings report. Benzinga's report can help you figure out the ins and outs of the earnings release.

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 predict Progressive will report earnings of $1.66 per share on revenue of $10.32 billion. Progressive earnings in the same period a year ago was $1.81 per share. Quarterly sales came in at $9.90 billion.

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 match the consensus estimate when it reports Wednesday, earnings would be down 8.29%. Sales would be up 4.28% from the year-ago period. Here is how the Progressive's reported EPS has stacked up against analyst estimates in the past:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020EPS Estimate 1.72 1.74 1.39 1.13EPS Actual 1.88 1.84 1.92 1.30Revenue Estimate 10.92 B 9.72 B 10.34 B 8.90 BRevenue Actual 9.97 B 9.65 B 9.43 B 9.90 B

Stock Performance

Over the last 52-week period, shares are up 14.01%. 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. Progressive is scheduled to hold the call at 09:30:00 ET and can be accessed here.