Benzinga | May 3, 2021 10:21AM EDT

Earnings Preview: Mercury General

Mercury General (NYSE:MCY) releases its next round of earnings this Tuesday, May 04. Here is Benzinga's essential guide to Mercury General'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

Analysts expect Mercury General earnings of $1.22 per share. Revenue will likely be around $932.36 million, according to the consensus estimate. In the same quarter last year, Mercury General reported EPS of $1.07 on revenue of $708.31 million.

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 14.02%. Sales would be up 31.63% from the same quarter last year. Here is how the Mercury General's reported EPS has stacked up against analyst estimates in the past: Quarter Q4 2021 Q3 2020 Q2 2020 Q1 2020EPS Estimate 0.69 1.06 0.78 0.88EPS Actual 1.38 1.23 1.86 1.07Revenue Estimate 932.26 M 894.55 M 959.38 M 972.87 MRevenue Actual 1.07 B 998.77 M 1.01 B 708.31 M

Stock Performance

Shares of Mercury General were trading at $62.28 as of April 30. Over the last 52-week period, shares are up 68.42%. 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. Mercury General is scheduled to hold the call at 13:00:00 ET and can be accessed here.