Benzinga | Oct 28, 2020 10:10AM EDT

A Preview Of Cheesecake Factory's Earnings

Cheesecake Factory (NASDAQ: CAKE) announces its next round of earnings this Thursday, October 29. Here is Benzinga's everything-that-matters guide for this Thursday'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

Cheesecake Factory EPS will likely be near $0.42 while revenue will be around $487.83 million, according to analysts. Cheesecake Factory EPS in the same period a year ago totaled $0.59. Revenue was $586.54 million.

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 171.19% decrease in the company's earnings. Revenue would be down 16.83% on a year-over-year basis. 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 -1.09 0.30 0.60 0.55EPS Actual -0.87 0.04 0.58 0.59Revenue Estimate 304.23 M 890.25 M 706.21 M 594.63 MRevenue Actual 295.85 M 615.11 M 694.03 M 586.54 M

Stock Performance

Shares of Cheesecake Factory were trading at $30.43 as of October 27. Over the last 52-week period, shares are down 28.31%. Given that these returns are generally negative, long-term shareholders are probably unhappy going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Cheesecake Factory is scheduled to hold the call at 17:00:00 ET and can be accessed here.