Benzinga | Nov 11, 2020 10:16AM EST

Dolby Laboratories's Earnings Outlook

Dolby Laboratories (NYSE: DLB) releases its next round of earnings this Thursday, November 12. Get the latest predictions in Benzinga's essential guide to the company's Q4 earnings report.

What Are Earnings, Net Income, 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

Based on management's projections, Dolby Laboratories analysts model for earnings of $0.34 per share on sales of $244.04 million. Dolby Laboratories EPS in the same period a year ago totaled $0.66. Sales were $298.83 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 Wall Street consensus estimate for earnings would represent a 48.48% decrease for the company. Sales would have fallen 18.33% from the same quarter last year. Here is how the company's EPS has stacked up against analyst estimates in the past:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2019EPS Estimate 0.27 1.09 0.49 0.48EPS Actual 0.86 1.04 0.64 0.66Revenue Estimate 232.61 M 361.35 M 285.81 M 297.55 MRevenue Actual 246.91 M 351.81 M 291.88 M 298.83 M

Stock Performance

Shares of Dolby Laboratories were trading at $84.06 as of November 10. Over the last 52-week period, shares are up 29.89%. Given that these returns are generally positive, long-term shareholders should be satisfied going into this earnings release.

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