Benzinga | May 18, 2021 10:06AM EDT

A Preview Of Lowe's Companies's Earnings

Lowe's Companies (NYSE:LOW) announces its next round of earnings this Wednesday, May 19. Here is Benzinga's everything-that-matters guide for this Wednesday's Q1 earnings announcement.

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

Wall Street expects EPS of $2.54 and sales around $23.35 billion. In the same quarter last year, Lowe's Companies posted EPS of $1.77 on sales of $19.68 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 post earnings in line with the consensus estimate when it reports Wednesday, EPS would be up 43.5%. Sales would be up 18.68% from the same quarter last year. Lowe's Companies's reported EPS has stacked up against analyst estimates in the past like this: Quarter Q4 2021 Q3 2020 Q2 2020 Q1 2020EPS Estimate 1.19 1.99 2.95 1.31EPS Actual 1.33 1.98 3.75 1.77Revenue Estimate 19.24 B 21.25 B 24.27 B 18.08 BRevenue Actual 20.31 B 22.31 B 27.30 B 19.68 B

Stock Performance

For a full 12 months, the return has risen by 66.73%. Given that these returns are generally positive, long-term shareholders are probably relaxed 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. Lowe's Companies is scheduled to hold the call at 09:00:00 ET and can be accessed here.