Benzinga | Feb 1, 2021 10:14AM EST

Preview: Magellan Midstream's Earnings

Magellan Midstream (NYSE:MMP) announces its next round of earnings this Tuesday, February 02. Here is Benzinga's everything-that-matters guide for this Tuesday's Q4 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

Wall Street analysts see Magellan Midstream reporting earnings of $0.85 per share on revenue of $639.04 million. In the same quarter last year, Magellan Midstream posted EPS of $1.31 on sales of $740.68 million.

Why Analyst Estimates And Earnings Surprises Are Important

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

If the company were to match the consensus estimate, earnings would be down 35.11%. Sales would be down 13.72% from the same quarter last year. 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 0.84 0.73 1.03 1.18EPS Actual 0.97 0.65 1.28 1.31Revenue Estimate 574.94 M 558.03 M 683.97 M 837.80 MRevenue Actual 598.26 M 460.41 M 782.81 M 740.68 M

Stock Performance

Shares of Magellan Midstream were trading at $44.8 as of January 29. Over the last 52-week period, shares are down 26.41%. 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. Magellan Midstream is scheduled to hold the call at 13:30:00 ET and can be accessed here.