Benzinga | Nov 9, 2020 10:13AM EST

Advance Auto Parts Earnings Preview

Advance Auto Parts (NYSE: AAP) announces its next round of earnings this Tuesday, November 10. Here is Benzinga's everything-that-matters guide for this Tuesday's Q3 earnings announcement.

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

Wall Street analysts see Advance Auto Parts reporting earnings of $2.66 per share on sales of $2.48 billion. Advance Auto Parts EPS in the same period a year ago totaled $2.1. Revenue was $2.31 billion.

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.

The analyst consensus estimate would represent a 26.67% increase in the company's earnings. Sales would be up 7.27% from the year-ago period. Advance Auto Parts's reported EPS has stacked up against analyst estimates in the past like this:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019EPS Estimate 1.98 1.75 1.36 2.05EPS Actual 2.92 0.91 1.64 2.10Revenue Estimate 2.38 B 2.74 B 2.12 B 2.30 BRevenue Actual 2.50 B 2.70 B 2.11 B 2.31 B

Stock Performance

Shares of Advance Auto Parts were trading at $156.35 as of November 06. Over the last 52-week period, shares are up 2.6%. Given that these returns are generally positive, long-term shareholders are probably happy going into this earnings release.

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