Benzinga | Jun 2, 2021 10:06AM EDT

Earnings Outlook For Broadcom

On Thursday, June 03, Broadcom (NASDAQ:AVGO) will release its latest earnings report. Check out Benzinga's preview to understand the implications.

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

Broadcom EPS will likely be near $6.42 while revenue will be around $6.51 billion, according to analysts. In the same quarter last year, Broadcom reported earnings per share of $5.14 on sales of $5.74 billion.

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 24.9%. Revenue would be up 13.38% from the year-ago period. The company's reported EPS has stacked up against analyst estimates in the past like this: Quarter Q1 2021 Q4 2020 Q3 2020 Q2 2020EPS Estimate 6.55 6.25 5.24 5.14EPS Actual 6.61 6.35 5.40 5.14Revenue Estimate 6.61 B 6.43 B 5.76 B 5.69 BRevenue Actual 6.66 B 6.47 B 5.82 B 5.74 B

Stock Performance

Over the last 52-week period, shares are up 53.55%. Given that these returns are generally positive, long-term shareholders can be content going into this earnings release.

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