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On Thursday, December 10, Broadcom (NASDAQ:AVGO) will release its latest earnings report. Benzinga's outlook for Broadcom is included in the following report.
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
Based on management's projections, Broadcom analysts model for earnings of $6.24 per share on sales of $6.43 billion. In the same quarter last year, Broadcom reported earnings per share of $5.39 on revenue of $5.77 billion.
Why Analyst Estimates And Earnings Surprises Are Important
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 report earnings in line when it publishes results Thursday, earnings would be up 15.77%. Revenue would be up 11.52% from the year-ago period. Here is how the company's reported EPS has stacked up against analyst estimates in the past:
For a full 12 months, the return has risen by 28.9%. Given that these returns are generally positive, long-term shareholders are probably relaxed going into this earnings release. Long-term shareholders are already enjoying 12-month gains prior to the announcement.
Do not be surprised to see the stock move on comments made during its conference call. Broadcom is scheduled to hold the call at 17:00:00 ET and can be accessed here.
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