Benzinga | Jan 29, 2021 10:10AM EST

Capital Southwest Earnings Preview

Capital Southwest (NASDAQ:CSWC) announces its next round of earnings this Monday, February 01. Here is Benzinga's everything-that-matters guide for this Monday's Q3 earnings announcement.

Net Income, Earnings, 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

Sell-side analysts expect Capital Southwest's EPS to be near $0.41 on sales of $16.63 million. Capital Southwest earnings in the same period a year ago was $0.39 per share. Quarterly sales came in at $15.98 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.

The Wall Street consensus estimate for earnings would represent a 5.13% increase for the company. Revenue would be up 4.04% on a year-over-year basis. Here is how the company's reported EPS has compared to analyst estimates in the past:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2020EPS Estimate 0.39 0.38 0.39 0.38EPS Actual 0.45 0.38 0.37 0.39Revenue Estimate 15.75 M 15.49 M 15.63 M 15.71 MRevenue Actual 16.68 M 15.16 M 15.04 M 15.98 M

Stock Performance

Over the past 52-week period, shares of Capital Southwest have declined 12.53%. 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. Capital Southwest is scheduled to hold the call at 11:00:00 ET and can be accessed here.