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On Thursday, January 21, Travelers Companies (NYSE:TRV) will release its latest earnings report. Decipher the announcement with Benzinga's help.
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
Analysts covering Travelers Companies modeled for quarterly EPS of $3.17 on revenue of $7.27 billion. In the same quarter last year, Travelers Companies posted EPS of $3.32 on sales of $8.06 billion.
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.
The analyst consensus estimate would represent a 4.52% decrease in the company's earnings. Revenue would have fallen 9.84% from the same quarter last year. Here is how the company's reported EPS has compared to analyst estimates in the past:
Shares of Travelers Companies were trading at $143.43 as of January 19. Over the last 52-week period, shares are up 6.93%. Given that these returns are generally positive, long-term shareholders are probably happy going into this earnings release.
Do not be surprised to see the stock move on comments made during its conference call. Travelers Companies is scheduled to hold the call at 09:00:00 ET and can be accessed here.
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