Benzinga | Feb 5, 2021 10:15AM EST

Earnings Outlook for CDK Global

On Monday, February 08, CDK Global (NASDAQ:CDK) will release its latest earnings report. Benzinga's report can help you figure out the ins and outs of the earnings release.

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

Analysts expect CDK Global earnings of $0.64 per share. Revenue will likely be around $415.93 million, according to the consensus estimate. CDK Global reported a profit of $0.8 per share when it published results during the same quarter last year. Sales in that period totaled $499.60 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.

If the company were to match the consensus estimate, earnings would be down 20.0%. Sales would be down 16.75% from the same quarter last year. 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 0.68 0.50 0.86 0.8EPS Actual 0.82 0.67 0.92 0.8Revenue Estimate 466.94 M 424.40 M 501.68 M 493.01 MRevenue Actual 493.60 M 449.60 M 516.30 M 499.60 M

Stock Performance

Shares of CDK Global were trading at $53.25 as of February 04. Over the last 52-week period, shares are up 1.3%. Given that these returns are generally positive, long-term shareholders are probably satisfied going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. CDK Global is scheduled to hold the call at 17:00:00 ET and can be accessed here.