Benzinga | Jan 27, 2021 10:30AM EST

Earnings Outlook For Federated Hermes

Federated Hermes (NYSE:FHI) unveils its next round of earnings this Thursday, January 28. Here is Benzinga's everything-that-matters guide for the earnings announcement.

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

Federated Hermes earnings will be near $0.79 per share on sales of $351.54 million, according to analysts. Federated Hermes EPS in the same period a year ago totaled $0.81. Sales were $358.02 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, earnings would be down 2.47%. Revenue would be down 1.81% on a year-over-year basis. Federated Hermes's reported EPS has stacked up against analyst estimates in the past like this:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020EPS Estimate 0.71 0.63 0.69 0.70EPS Actual 0.85 0.80 0.63 0.81Revenue Estimate 356.55 M 352.14 M 358.73 M 353.18 MRevenue Actual 364.45 M 360.71 M 359.18 M 358.02 M

Stock Performance

Shares of Federated Hermes were trading at $29.73 as of January 26. Over the last 52-week period, shares are down 14.19%. Given that these returns are generally negative, long-term shareholders are likely unhappy going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Federated Hermes is scheduled to hold the call at 09:00:00 ET and can be accessed here.