Benzinga | Oct 23, 2020 10:12AM EDT

Cincinnati Financial Earnings Preview

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

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

Cincinnati Financial EPS is expected to be around $0.74, according to sell-side analysts. Sales will likely be near $1.65 billion. In the same quarter last year, Cincinnati Financial posted EPS of $1.08 on sales of $1.70 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 analyst consensus estimate would represent a 31.48% decrease in the company's earnings. Revenue would be down 2.94% from the year-ago period. Here is how the Cincinnati Financial's reported EPS has stacked up against analyst estimates in the past:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019EPS Estimate 0.67 1.04 1.10 0.89EPS Actual 0.44 0.84 1.23 1.08Revenue Estimate 1.61 B 1.60 B 1.56 B 1.54 BRevenue Actual 2.71 B 1.46 B 2.15 B 1.70 B

Stock Performance

Over the past 52-week period, shares of Cincinnati Financial have declined 30.42%.

Do not be surprised to see the stock move on comments made during its conference call. Cincinnati Financial is scheduled to hold the call at 11:00:00 ET and can be accessed here.