Benzinga | Nov 20, 2020 10:04AM EST

Earnings Outlook for Daqo New Energy

On Monday, November 23, Daqo New Energy (NYSE: DQ) will release its latest earnings report. Check out Benzinga's preview to understand the implications.

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

Wall Street expects EPS of $1.61 and sales around $139.13 million. In the same quarter last year, Daqo New Energy reported EPS of $0.67 on revenue of $83.91 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 Wall Street consensus estimate for earnings would represent a 140.3% increase for the company. Sales would be up 65.81% from the same quarter last year. Here is how the Daqo New Energy's reported EPS has stacked up against analyst estimates in the past:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019EPS Estimate -0.03 1.61 0.91 0.43EPS Actual 0.47 2.57 1.72 0.67Revenue Estimate 111.37 M 150.50 M 118.80 M 85.60 MRevenue Actual 133.52 M 168.83 M 118.92 M 83.91 M

Stock Performance

For a full 12 months, the return has risen by 449.45%. Given that these returns are generally positive, long-term shareholders are probably relaxed going into this earnings release. Long-term shareholders are already enjoying 12-month gains prior to the announcement.

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