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Earnings Preview: Capstead Mortgage

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Capstead Mortgage (NYSE:CMO) will be releasing its next round of earnings this Wednesday, January 27. For all of the relevant information, here is your guide for Wednesday's Q4 earnings announcement.

Net Income, Earnings, 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 expects EPS of $0.16 and sales around $37.23 million. In the same quarter last year, Capstead Mortgage reported earnings per share of $0.15 on revenue of $74.28 million.

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.

View more earnings on CMO

If the company were to match the consensus estimate when it reports Wednesday, earnings would be up 6.67%. Sales would be down 49.88% on a year-over-year basis. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

EPS Estimate

0.18

0.16

0.14

0.09

EPS Actual

0.16

0.18

0.16

0.15

Revenue Estimate

43.43 M

46.71 M

65.00 M

73.00 M

Revenue Actual

37.61 M

48.16 M

69.63 M

74.28 M

Stock Performance

Shares of Capstead Mortgage were trading at $5.815 as of January 25. Over the last 52-week period, shares are down 29.78%. Given that these returns are generally negative, long-term shareholders are likely a little upset going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Capstead Mortgage is scheduled to hold the call at 09:00:00 ET and can be accessed here.

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