Benzinga | Apr 29, 2021 10:22AM EDT

Aon's Earnings Outlook

Aon (NYSE:AON) releases its next round of earnings this Friday, April 30. Here is Benzinga's essential guide to Aon'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

Aon EPS is expected to be around $4.05, according to sell-side analysts. Sales will likely be near $3.35 billion. Aon reported a per-share profit of $3.68 when it published results during the same quarter last year. Sales in that period totaled $3.22 billion.

Why Analyst Estimates And Earnings Surprises Are Important

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

If the company were to match the consensus estimate, earnings would be up 10.05%. Revenue would be up 4.07% on a year-over-year basis. Here is how the Aon's reported EPS has stacked up against analyst estimates in the past:

Quarter Q4 2021 Q3 2020 Q2 2020 Q1 2020EPS Estimate 2.46 1.49 1.93 3.66EPS Actual 2.62 1.53 1.96 3.68Revenue Estimate 2.84 B 2.32 B 2.55 B 3.30 BRevenue Actual 2.96 B 2.38 B 2.50 B 3.22 B

Stock Performance

Shares of Aon were trading at $238.29 as of April 28. Over the last 52-week period, shares are up 33.89%. Given that these returns are generally positive, long-term shareholders are probably content going into this earnings release.

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