Benzinga | Feb 3, 2021 10:12AM EST

Earnings Preview: Open Text

Open Text (NASDAQ:OTEX) unveils its next round of earnings this Thursday, February 04. 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

Open Text EPS will likely be near $0.85 while revenue will be around $814.84 million, according to analysts. In the same quarter last year, Open Text posted EPS of $0.84 on sales of $771.56 million.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

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 Thursday, earnings would be up 1.19%. Revenue would be up 5.61% on a year-over-year basis. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Quarter Q1 2020 Q4 2020 Q3 2020 Q2 2020EPS Estimate 0.67 0.61 0.58 0.78EPS Actual 0.89 0.80 0.61 0.84Revenue Estimate 758.35 M 804.31 M 789.49 M 754.83 MRevenue Actual 804.01 M 826.61 M 814.68 M 771.56 M

Stock Performance

Shares of Open Text were trading at $46.73 as of February 02. Over the last 52-week period, shares are down 1.25%. 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. Open Text is scheduled to hold the call at 17:00:00 ET and can be accessed here.