Benzinga | Jan 27, 2021 10:39AM EST

Earnings Preview for Selective Insurance Group

On Thursday, January 28, Selective Insurance Group (NASDAQ:SIGI) will report its last quarter's earnings. Here is Benzinga's preview of the company's release.

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

Analysts covering Selective Insurance Group modeled for quarterly EPS of $1.2 on revenue of $661.83 million. Selective Insurance Group reported a profit of $1.37 per share when it published results during the same quarter last year. Sales in that period totaled $628.20 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 match the consensus estimate, earnings would be down 12.41%. Revenue would be up 5.35% on a year-over-year basis. The company's reported EPS has stacked up against analyst estimates in the past like this:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020EPS Estimate 1.07 0.33 1.02 1.12EPS Actual 1.06 0.40 0.84 1.37Revenue Estimate 701.00 M 675.03 M 701.39 M 623.81 MRevenue Actual 719.50 M 724.80 M 647.30 M 628.20 M

Stock Performance

Shares of Selective Insurance Group were trading at $67.71 as of January 26. Over the last 52-week period, shares are down 1.28%. Given that these returns are generally negative, long-term shareholders are probably a little upset going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Selective Insurance Group is scheduled to hold the call at 10:00:00 ET and can be accessed here.