Benzinga | Oct 21, 2020 10:19AM EDT

Carpenter Technology's Earnings: A Preview

On Thursday, October 22, Carpenter Technology (NYSE: CRS) will release its latest earnings report. Decipher the announcement with Benzinga's help.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and 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 equates to net income divided by the number of shares outstanding.

Earnings And Revenue

Sell-side analysts are expecting Carpenter Technology's loss per share to be near $0.58 on sales of $371.00 million. Carpenter Technology reported a profit of $0.85 per share when it published results during the same quarter last year. Sales in that period totaled $585.40 million.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

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 168.24% decrease in the company's earnings. Revenue would be down 36.62% on a year-over-year basis. Here is how the company's reported EPS has compared to analyst estimates in the past:

Quarter Q4 2020 Q3 2020 Q2 2020 Q1 2019EPS Estimate -0.35 0.77 0.87 0.89EPS Actual -0.31 0.82 0.83 0.85Revenue Estimate 441.85 M 576.15 M 576.20 M 607.14 MRevenue Actual 437.30 M 585.40 M 573.00 M 585.40 M

Stock Performance

Shares of Carpenter Technology were trading at $17.5 as of October 20. Over the last 52-week period, shares are down 64.03%. Given that these returns are generally negative, long-term shareholders are likely a little upset going into this earnings release.