Benzinga | Nov 9, 2020 10:18AM EST

Preview: Amdocs's Earnings

Amdocs (NASDAQ: DOX) unveils its next round of earnings this Tuesday, November 10. Get prepared with Benzinga's ultimate preview for Amdocs's Q4 earnings.

Net Income, Earnings, And Earnings Per Share

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

Earnings And Revenue

Wall Street analysts see Amdocs reporting earnings of $1.18 per share on sales of $1.03 billion. Amdocs earnings in the same period a year ago was $1.08 per share. Quarterly sales came in at $1.03 billion.

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.

If the company were to post earnings in line with the consensus estimate when it reports Tuesday, EPS would be up 9.26%. Sales would be unchanged on a year-over-year basis. In comparison to analyst estimates in the past, here is how the company's reported EPS stacks up:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2019EPS Estimate 1.05 1.06 1.05 1.08EPS Actual 1.07 1.08 1.06 1.08Revenue Estimate 1.01 B 1.04 B 1.03 B 1.03 BRevenue Actual 1.03 B 1.05 B 1.04 B 1.03 B

Stock Performance

Shares of Amdocs were trading at $58.02 as of November 06. Over the last 52-week period, shares are down 9.85%. Given that these returns are generally negative, long-term shareholders are probably upset going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Amdocs is scheduled to hold the call at 17:00:00 ET and can be accessed here.