Benzinga | Feb 22, 2021 10:20AM EST

Earnings Preview: Chemed

Chemed (NYSE:CHE) releases its next round of earnings this Tuesday, February 23. Here is Benzinga's essential guide to Chemed's Q4 earnings report.

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 expects EPS of $5.13 and sales around $537.20 million. In the same quarter last year, Chemed reported earnings per share of $4.22 on sales of $522.32 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.

The analyst consensus estimate would represent a 21.56% increase in the company's earnings. Revenue would be up 2.85% 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 3.97 3.75 3.65 4.09EPS Actual 4.86 4.41 3.68 4.22Revenue Estimate 514.21 M 522.89 M 520.18 M 524.19 MRevenue Actual 528.30 M 502.20 M 515.80 M 522.32 M

Stock Performance

Shares of Chemed were trading at $486.78 as of February 19. Over the last 52-week period, shares are up 4.69%. 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. Chemed is scheduled to hold the call at 10:00:00 ET and can be accessed here.