Benzinga | Oct 21, 2020 10:18AM EDT

A Preview Of W.W. Grainger's Earnings

On Thursday, October 22, W.W. Grainger (NYSE: GWW) will release its latest earnings report. Benzinga's report can help you figure out the ins and outs of the earnings release.

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 analysts see W.W. Grainger reporting earnings of $4.15 per share on sales of $2.98 billion. W.W. Grainger EPS in the same period a year ago totaled $4.26. Sales were $2.95 billion.

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.

If the company were to post earnings in line with the consensus estimate when it reports Thursday, EPS would be down 2.58%. Revenue would be have grown 1.12% 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 3.24 4.43 4.02 4.40EPS Actual 3.75 4.24 3.88 4.26Revenue Estimate 2.71 B 2.86 B 2.86 B 2.95 BRevenue Actual 2.84 B 3.00 B 2.85 B 2.95 B

Stock Performance

Shares of W.W. Grainger were trading at $375.94 as of October 20. Over the last 52-week period, shares are up 19.94%. Given that these returns are generally positive, long-term shareholders are probably content going into this earnings release.