Benzinga | Nov 3, 2020 10:03AM EST

Earnings Preview: Allstate

Allstate (NYSE: ALL) releases its next round of earnings this Wednesday, November 04. Here is Benzinga's essential guide to Allstate's Q3 earnings report.

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

Allstate EPS is expected to be around $1.67, according to sell-side analysts. Sales will likely be near $9.54 billion. In the same quarter last year, Allstate reported EPS of $2.84 on revenue of $9.68 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.

The Wall Street consensus estimate for earnings would represent a 41.2% decrease for the company. Revenue would be down 1.41% from the year-ago period. In comparison to analyst estimates in the past, here is how the company's reported EPS stacks up:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019EPS Estimate 1.55 3.50 3.24 2.58EPS Actual 2.46 3.54 3.13 2.84Revenue Estimate 9.04 B 9.18 B 8.89 B 9.23 BRevenue Actual 9.64 B 8.79 B 9.19 B 9.68 B

Stock Performance

Shares of Allstate were trading at $90.85 as of November 02. Over the last 52-week period, shares are down 12.77%. Given that these returns are generally negative, long-term shareholders are likely a little upset going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Allstate is scheduled to hold the call at 09:00:00 ET and can be accessed here.