Benzinga | Mar 2, 2021 10:06AM EST

A Preview Of Wendy's Earnings

On Wednesday, March 03, Wendy's (NASDAQ:WEN) will release its latest earnings report. Check out Benzinga's preview to understand the implications.

Net Income, Earnings, 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

Analysts expect Wendy's earnings of $0.18 per share. Revenue will likely be around $476.39 million, according to the consensus estimate. In the same quarter last year, Wendy's reported earnings per share of $0.08 on sales of $427.19 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 Wall Street consensus estimate for earnings would represent a 125.0% increase for the company. Sales would be up 11.52% 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 0.17 0.11 0.10 0.08EPS Actual 0.19 0.12 0.09 0.08Revenue Estimate 453.28 M 409.61 M 415.54 M 424.53 MRevenue Actual 452.24 M 402.31 M 404.96 M 427.19 M

Stock Performance

Shares of Wendy's were trading at $21.28 as of March 01. Over the last 52-week period, shares are up 6.56%. Given that these returns are generally positive, long-term shareholders should be content going into this earnings release.

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