Benzinga | Jun 1, 2021 10:24AM EDT

Preview: NetApp's Earnings

On Wednesday, June 02, NetApp (NASDAQ:NTAP) will report its last quarter's earnings. Here is Benzinga's preview of the company's release.

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

Sell-side analysts expect NetApp's EPS to be near $1.12 on sales of $1.50 billion. NetApp EPS in the same period a year ago totaled $1.19. Revenue was $1.40 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.

The Wall Street estimate would represent a 5.88% declinein the company's earnings. Revenue would be up 7.07% from the same quarter last year. The company's reported EPS has stacked up against analyst estimates in the past like this: Quarter Q3 2021 Q2 2020 Q1 2020 Q4 2020EPS Estimate 1.01 0.73 0.41 1.15EPS Actual 1.10 1.05 0.73 1.19Revenue Estimate 1.43 B 1.31 B 1.15 B 1.43 BRevenue Actual 1.47 B 1.42 B 1.30 B 1.40 B

Stock Performance

Shares of NetApp were trading at $77.37 as of May 31. Over the last 52-week period, shares are up 68.05%. 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. NetApp is scheduled to hold the call at 17:00:00 ET and can be accessed here.