Benzinga | Oct 23, 2020 10:07AM EDT

Earnings Preview: Canon

On Monday, October 26, Canon (NYSE: CAJ) will release its latest earnings report. Benzinga's report can help you figure out the ins and outs of the earnings release.

Net Income, Earnings, 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

Canon EPS will likely be near $0.01 while revenue will be around $7.09 billion, according to analysts. In the same quarter last year, Canon reported earnings per share of $0.23 on revenue of $8.05 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.

The analyst consensus estimate would represent a 95.65% decrease in the company's earnings. Sales would have fallen 11.94% from the same quarter last year. Here is how the company's reported EPS has compared to analyst estimates in the past:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019EPS Estimate -0.03 0.17 0.42 0.26EPS Actual -0.08 0.19 0.27 0.23Revenue Estimate 6.78 B 7.53 B 9.25 B 8.34 BRevenue Actual 6.23 B 7.18 B 8.77 B 8.05 B

Stock Performance

Shares of Canon were trading at $16.265 as of October 22. Over the last 52-week period, shares are down 36.12%. Given that these returns are generally negative, long-term shareholders are likely unhappy going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Canon is scheduled to hold the call at 04:00:00 ET and can be accessed here.