Benzinga | Oct 26, 2020 10:16AM EDT

A Preview Of AudioCodes's Earnings

AudioCodes (NASDAQ: AUDC) releases its next round of earnings this Tuesday, October 27. Here is Benzinga's essential guide to AudioCodes's Q3 earnings report.

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 expects EPS of $0.31 and sales around $55.63 million. AudioCodes EPS in the same period a year ago totaled $0.24. Revenue was $51.41 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.

If the company were to report earnings in line when it publishes results Tuesday, earnings would be up 29.17%. Revenue would be up 8.2% from the year-ago period. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019EPS Estimate 0.27 0.23 0.24 0.20EPS Actual 0.32 0.25 0.26 0.24Revenue Estimate 52.90 M 50.85 M 51.90 M 49.00 MRevenue Actual 53.52 M 52.02 M 52.80 M 51.41 M

Stock Performance

Over the last 52-week period, shares are up 48.74%. Given that these returns are generally positive, long-term shareholders can be content going into this earnings release.

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