Benzinga | Oct 28, 2020 10:10AM EDT

Earnings Preview: Covanta Holding

Covanta Holding (NYSE: CVA) releases its next round of earnings this Thursday, October 29. Get the latest predictions in Benzinga's essential guide to the company'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

Based on management's projections, Covanta Holding analysts modeled for a loss of $0.02 per share on sales of $462.99 million. In the same quarter last year, Covanta Holding announced EPS of $0.1 on revenue of $465.00 million.

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 120.0% decrease in the company's earnings. Sales would have fallen 0.43% from the same quarter last year. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019EPS Estimate 0.19 -0.22 0.07 0.1EPS Actual -0.10 -0.10 0.09 0.1Revenue Estimate 450.69 M 455.76 M 480.68 M 466.85 MRevenue Actual 454.00 M 468.00 M 485.00 M 465.00 M

Stock Performance

Shares of Covanta Holding were trading at $7.76 as of October 27. Over the last 52-week period, shares are down 47.44%. Given that these returns are generally negative, long-term shareholders are probably a little upset going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Covanta Holding is scheduled to hold the call at 08:30:00 ET and can be accessed here.