Benzinga | Feb 15, 2021 10:42AM EST

Earnings Preview: AutoNation

On Tuesday, February 16, AutoNation (NYSE:AN) will release its latest earnings report. Decipher the announcement with Benzinga's help.

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

Based on AutoNation management projections, analysts predict EPS of $2.01 on revenue of $5.56 billion. In the same quarter last year, AutoNation announced EPS of $1.31 on revenue of $5.55 billion.

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

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.

The Wall Street consensus estimate for earnings would represent a 53.44% increase for the company. Sales would be up 0.2% from the year-ago period. The company's reported EPS has stacked up against analyst estimates in the past like this:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020EPS Estimate 1.60 0.37 0.69 1.14EPS Actual 2.38 1.41 0.91 1.31Revenue Estimate 5.12 B 4.08 B 4.61 B 5.53 BRevenue Actual 5.41 B 4.53 B 4.67 B 5.55 B

Stock Performance

Shares of AutoNation were trading at $78.2 as of February 11. Over the last 52-week period, shares are up 65.24%. 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. AutoNation is scheduled to hold the call at 10:00:00 ET and can be accessed here.