Benzinga | Feb 9, 2021 10:33AM EST

Cincinnati Financial Earnings Preview

On Wednesday, February 10, Cincinnati Financial (NASDAQ:CINF) will release its latest earnings report. Benzinga's report can help you figure out the ins and outs of the earnings release.

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

Wall Street analysts see Cincinnati Financial reporting earnings of $1.19 per share on revenue of $1.66 billion. Cincinnati Financial earnings in the same period a year ago was $1.23 per share. Quarterly sales came in at $2.15 billion.

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 post earnings in line with the consensus estimate when it reports Wednesday, EPS would be down 3.25%. Sales would have fallen 22.86% from the same quarter last year. Here is how the company's EPS has stacked up against analyst estimates in the past:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020EPS Estimate 0.74 0.67 1.04 1.10EPS Actual 0.39 0.44 0.84 1.23Revenue Estimate 1.65 B 1.61 B 1.60 B 1.56 BRevenue Actual 2.23 B 2.71 B 1.46 B 2.15 B

Stock Performance

Over the last 52-week period, shares are down 23.09%. Given that these returns are generally negative, long-term shareholders won't be happy going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Cincinnati Financial is scheduled to hold the call at 11:00:00 ET and can be accessed here.