Benzinga | Feb 2, 2021 10:21AM EST

W.W. Grainger's Earnings: A Preview

W.W. Grainger (NYSE:GWW) unveils its next round of earnings this Wednesday, February 03. Get prepared with Benzinga's ultimate preview for W.W. Grainger's Q4 earnings.

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 expect W.W. Grainger earnings of $3.85 per share. Revenue will likely be around $2.92 billion, according to the consensus estimate. In the same quarter last year, W.W. Grainger reported earnings per share of $3.88 on sales of $2.85 billion.

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 report earnings in line when it publishes results Wednesday, earnings would be down 0.77%. Sales would be up 2.56% from the year-ago period. W.W. Grainger's reported EPS has stacked up against analyst estimates in the past like this:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020EPS Estimate 4.15 3.24 4.43 4.02EPS Actual 4.52 3.75 4.24 3.88Revenue Estimate 2.98 B 2.71 B 2.86 B 2.86 BRevenue Actual 3.02 B 2.84 B 3.00 B 2.85 B

Stock Performance

For a full 12 months, the return has risen by 18.34%. Given that these returns are generally positive, long-term shareholders are probably relaxed 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. W.W. Grainger is scheduled to hold the call at 11:00:00 ET and can be accessed here.