Benzinga | Apr 20, 2021 10:31AM EDT

Preview: Baker Hughes's Earnings

Baker Hughes (NYSE:BKR) releases its next round of earnings this Wednesday, April 21. Here is Benzinga's essential guide to Baker Hughes's Q1 earnings report.

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

Based on management's projections, Baker Hughes analysts model for earnings of $0.11 per share on sales of $4.80 billion. In the same quarter last year, Baker Hughes posted EPS of $0.11 on sales of $5.42 billion.

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 estimate would represent no change in the company's earnings. Revenue would be down 11.52% from the year-ago period. The company's reported EPS has stacked up against analyst estimates in the past like this:

Quarter Q4 2021 Q3 2020 Q2 2020 Q1 2020EPS Estimate 0.17 0.04 0 0.11EPS Actual -0.07 0.04 -0.05 0.11Revenue Estimate 5.42 B 4.78 B 4.80 B 5.63 BRevenue Actual 5.50 B 5.05 B 4.74 B 5.42 B

Stock Performance

Shares of Baker Hughes were trading at $20.06 as of April 19. Over the last 52-week period, shares are up 51.35%. 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. Baker Hughes is scheduled to hold the call at 08:00:00 ET and can be accessed here.