Benzinga | Apr 19, 2021 10:22AM EDT

Travelers Companies's Earnings: A Preview

Travelers Companies (NYSE:TRV) will be releasing its next round of earnings this Tuesday, April 20. For all of the relevant information, here is your guide for Tuesday's Q1 earnings announcement.

What Are Earnings, Net Income, 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

Travelers Companies earnings will be near $2.37 per share on sales of $7.54 billion, according to analysts. In the same quarter last year, Travelers Companies reported earnings per share of $2.62 on sales of $7.91 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.

If the company were to report earnings in line when it publishes results Tuesday, earnings would be down 9.54%. Revenue would be down 4.65% from the year-ago period. Here is how the company's EPS has stacked up against analyst estimates in the past:

Quarter Q4 2021 Q3 2020 Q2 2020 Q1 2020EPS Estimate 3.18 3.16 -0.2 2.85EPS Actual 4.91 3.12 -0.2 2.62Revenue Estimate 7.27 B 7.55 B 7.37 B 7.42 BRevenue Actual 8.40 B 8.28 B 7.40 B 7.91 B

Stock Performance

Over the last 52-week period, shares are up 52.27%. Given that these returns are generally positive, long-term shareholders can relax going into this earnings release. Long-term shareholders are already enjoying 12-month gains prior to the announcement.

Do not be surprised to see the stock move on comments made during its conference call. Travelers Companies is scheduled to hold the call at 09:00:00 ET and can be accessed here.