Benzinga | Oct 27, 2020 10:24AM EDT

Casa Systems's Earnings: A Preview

Casa Systems (NASDAQ: CASA) will be releasing its next round of earnings this Wednesday, October 28. For all of the relevant information, here is your guide for Wednesday's Q3 earnings announcement.

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

Based on management's projections, Casa Systems analysts model for earnings of $0.04 per share on sales of $91.46 million. Casa Systems reported a loss of $0.03 when it published results during the same quarter last year. Sales in that period totaled $81.82 million.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

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 post earnings in line with the consensus estimate when it reports Wednesday, EPS would be up 233.33%. Sales would be up 11.79% on a year-over-year basis. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019EPS Estimate -0.03 -0.05 -0.01 0.10EPS Actual 0.01 -0.07 0.15 -0.03Revenue Estimate 76.09 M 72.13 M 103.71 M 108.00 MRevenue Actual 83.35 M 83.62 M 112.89 M 81.82 M

Stock Performance

Shares of Casa Systems were trading at $4.9 as of October 26. Over the last 52-week period, shares are down 29.39%. Given that these returns are generally negative, long-term shareholders are probably a little upset going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Casa Systems is scheduled to hold the call at 17:00:00 ET and can be accessed here.