Benzinga | Feb 10, 2021 10:42AM EST

Preview: Pixelworks's Earnings

Pixelworks (NASDAQ:PXLW) unveils its next round of earnings this Thursday, February 11. Here is Benzinga's everything-that-matters guide for the earnings announcement.

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 are predicting Pixelworks will report a loss of $0.1 per share on revenue of $9.50 million. In the same quarter last year, Pixelworks posted a loss of $0.06 per share on sales of $16.02 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 66.67%. Sales would have fallen 40.71% from the same quarter last year. Here is how the company's reported EPS has compared to analyst estimates in the past:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020EPS Estimate -0.10 -0.1 -0.09 -0.07EPS Actual -0.11 -0.1 -0.07 -0.06Revenue Estimate 8.62 M 10.00 M 13.90 M 15.75 MRevenue Actual 8.19 M 9.25 M 13.77 M 16.02 M

Stock Performance

Shares of Pixelworks were trading at $3.71 as of February 09. Over the last 52-week period, shares are down 18.64%. Given that these returns are generally negative, long-term shareholders are likely a little upset going into this earnings release.

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