Benzinga | Feb 26, 2021 10:04AM EST

Preview: Scientific Games's Earnings

On Monday, March 01, Scientific Games (NASDAQ:SGMS) will release its latest earnings report. Check out Benzinga's preview to understand the implications.

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

Sell-side analysts are expecting Scientific Games's loss per share to be near $0.47 on sales of $708.62 million. Scientific Games reported a per-share profit of $0.14 when it published results during the same quarter last year. Sales in that period totaled $863.00 million.

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.

The Wall Street consensus estimate for earnings would represent a 435.71% decrease for the company. Sales would be down 17.89% from the same quarter last year. In comparison to analyst estimates in the past, here is how the company's reported EPS stacks up:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020EPS Estimate -0.79 -1.70 -0.11 0.22EPS Actual -0.97 -2.15 -0.70 0.14Revenue Estimate 641.47 M 443.70 M 792.58 M 895.28 MRevenue Actual 698.00 M 539.00 M 725.00 M 863.00 M

Stock Performance

Shares of Scientific Games were trading at $44.06 as of February 25. Over the last 52-week period, shares are up 163.53%. Given that these returns are generally positive, long-term shareholders should be satisfied going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Scientific Games is scheduled to hold the call at 16:15:00 ET and can be accessed here.