Benzinga | Feb 22, 2021 10:22AM EST

Earnings Preview for Toll Brothers

On Tuesday, February 23, Toll Brothers (NYSE:TOL) 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 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

Analysts expect Toll Brothers earnings of $0.47 per share. Revenue will likely be around $1.35 billion, according to the consensus estimate. In the same quarter last year, Toll Brothers reported EPS of $0.41 on revenue of $1.33 billion.

Why Analyst Estimates And Earnings Surprises Are Important

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 report earnings in line when it publishes results Tuesday, earnings would be up 14.63%. Sales would be up 1.43% on a year-over-year basis. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Quarter Q4 2020 Q3 2020 Q2 2020 Q1 2020EPS Estimate 1.23 0.71 0.48 0.46EPS Actual 1.55 0.90 0.59 0.41Revenue Estimate 2.10 B 1.55 B 1.57 B 1.45 BRevenue Actual 2.55 B 1.65 B 1.55 B 1.33 B

Stock Performance

For a full 12 months, the return has risen by 22.26%. Given that these returns are generally positive, long-term shareholders are probably relaxed going into this earnings release. Long-term shareholders are already enjoying 12-month gains prior to the announcement.

Do not be surprised to see the stock move on comments made during its conference call. Toll Brothers is scheduled to hold the call at 08:30:00 ET and can be accessed here.