Benzinga | Apr 27, 2021 10:24AM EDT

A Preview Of Ribbon Communications's Earnings

Ribbon Communications (NASDAQ:RBBN) releases its next round of earnings this Wednesday, April 28. Here is Benzinga's essential guide to Ribbon Communications's Q1 earnings report.

What Are Earnings, Net Income, 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

Analysts predict Ribbon Communications will report earnings of $0.02 per share on revenue of $193.52 million. Ribbon Communications earnings in the same period a year ago was $0.01 per share. Quarterly sales came in at $157.98 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 match the consensus estimate, earnings would be up 100.0%. Sales would be have grown 22.49% from the same quarter last year. In comparison to analyst estimates in the past, here is how the company's reported EPS stacks up:

Quarter Q4 2021 Q3 2020 Q2 2020 Q1 2020EPS Estimate 0.14 0.06 0.05 -0.01EPS Actual 0.18 0.16 0.06 0.01Revenue Estimate 246.38 M 214.16 M 222.48 M 122.78 MRevenue Actual 244.20 M 231.12 M 210.49 M 157.98 M

Stock Performance

Over the last 52-week period, shares are up 130.57%. 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. Ribbon Communications is scheduled to hold the call at 16:30:00 ET and can be accessed here.