Benzinga | Oct 30, 2020 11:13AM EDT

Earnings Preview: Genpact

Genpact (NYSE: G) announces its next round of earnings this Monday, November 02. Here is Benzinga's everything-that-matters guide for this Monday's Q3 earnings announcement.

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

Sell-side analysts expect Genpact's EPS to be near $0.49 on sales of $903.59 million. In the same quarter last year, Genpact reported EPS of $0.56 on revenue of $888.80 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.

If the company were to match the consensus estimate, earnings would be down 12.5%. Sales would be up 1.66% from the same quarter last year. The company's reported EPS has stacked up against analyst estimates in the past like this:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019EPS Estimate 0.34 0.45 0.56 0.52EPS Actual 0.52 0.53 0.57 0.56Revenue Estimate 838.12 M 894.39 M 911.84 M 880.29 MRevenue Actual 900.09 M 923.19 M 940.74 M 888.80 M

Stock Performance

Shares of Genpact were trading at $34.23 as of October 29. Over the last 52-week period, shares are down 13.97%. Given that these returns are generally negative, long-term shareholders are likely unhappy going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Genpact is scheduled to hold the call at 16:30:00 ET and can be accessed here.