Benzinga | Jul 13, 2021 10:13AM EDT

Bank of America's Earnings: A Preview

Bank of America (NYSE:BAC) releases its next round of earnings this Wednesday, July 14. Get the latest predictions in Benzinga's essential guide to the company's Q2 earnings report.

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

Analysts covering Bank of America modeled for quarterly EPS of $0.77 on revenue of $21.83 billion. In the same quarter last year, Bank of America reported earnings per share of $0.37 on sales of $22.45 billion.

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.

The analyst consensus estimate would represent a 108.11% increase in the company's earnings. Revenue would be down 2.78% from the year-ago period. Here is how the company's reported EPS has stacked up against analyst estimates in the past: Quarter Q1 2021 Q4 2020 Q3 2020 Q2 2020EPS Estimate 0.66 0.55 0.49 0.27EPS Actual 0.86 0.59 0.51 0.37Revenue Estimate 22.13 B 20.68 B 20.81 B 22.01 BRevenue Actual 22.93 B 20.21 B 20.45 B 22.45 B

Stock Performance

Shares of Bank of America were trading at $40.63 as of July 12. Over the last 52-week period, shares are up 63.21%. 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. Bank of America is scheduled to hold the call at 09:00:00 ET and can be accessed here.