Benzinga | Feb 19, 2021 10:08AM EST

Cimarex Energy's Earnings: A Preview

On Monday, February 22, Cimarex Energy (NYSE:XEC) will release its latest earnings report. Check out Benzinga's preview to understand the implications.

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 Cimarex Energy reporting earnings of $0.68 per share on revenue of $419.66 million. Cimarex Energy reported a per-share profit of $1.18 when it published results during the same quarter last year. Sales in that period totaled $657.24 million.

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.

If the company were to post earnings in line with the consensus estimate when it reports Monday, EPS would be down 42.37%. Sales would be down 36.15% from the year-ago period. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020EPS Estimate 0.27 -0.49 0.34 1.22EPS Actual 0.51 -0.51 0.58 1.18Revenue Estimate 392.23 M 306.05 M 501.41 M 617.29 MRevenue Actual 401.66 M 249.38 M 472.83 M 657.24 M

Stock Performance

Shares of Cimarex Energy were trading at $49.39 as of February 18. Over the last 52-week period, shares are up 27.65%. Given that these returns are generally positive, long-term shareholders are probably content going into this earnings release.

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