Benzinga | Dec 15, 2020 10:04AM EST

Earnings Preview: Lennar

Lennar (NYSE:LEN) announces its next round of earnings this Wednesday, December 16. Here is Benzinga's everything-that-matters guide for this Wednesday's Q4 earnings announcement.

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

Analysts expect Lennar earnings of $2.37 per share. Revenue will likely be around $6.65 billion, according to the consensus estimate. Lennar reported a profit of $2.13 per share when it published results during the same quarter last year. Sales in that period totaled $6.97 billion.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

If the company were to match the consensus estimate when it reports Wednesday, earnings would be up 11.27%. Revenue would be down 4.62% from the same quarter last year. 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 2020EPS Estimate 1.55 1.07 0.84 1.90EPS Actual 2.12 1.65 1.27 2.13Revenue Estimate 5.47 B 4.93 B 4.16 B 6.55 BRevenue Actual 5.87 B 5.29 B 4.50 B 6.97 B

Stock Performance

Shares of Lennar were trading at $74.68 as of December 14. Over the last 52-week period, shares are up 33.24%. Given that these returns are generally positive, long-term shareholders can be satisfied going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Lennar is scheduled to hold the call at 11:00:00 ET and can be accessed here.