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Hope Bancorp (NASDAQ:HOPE) releases its next round of earnings this Tuesday, January 26. Get the latest predictions in Benzinga's essential guide to the company's Q4 earnings report.
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
Based on Hope Bancorp management projections, analysts predict EPS of $0.25 on revenue of $135.36 million. Hope Bancorp EPS in the same period a year ago totaled $0.34. Revenue was $126.49 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 when it reports Tuesday, earnings would be down 26.47%. Revenue would be up 7.01% on a year-over-year basis. Hope Bancorp's reported EPS has stacked up against analyst estimates in the past like this:
Over the past 52-week period, shares of Hope Bancorp have declined 15.03%. Given that these returns are generally negative, long-term shareholders are probably a little upset going into this earnings release.
Do not be surprised to see the stock move on comments made during its conference call. Hope Bancorp is scheduled to hold the call at 12:30:00 ET and can be accessed here.
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