Benzinga | Oct 28, 2020 10:07AM EDT

Archer-Daniels Midland's Earnings: A Preview

On Thursday, October 29, Archer-Daniels Midland (NYSE: ADM) will release its latest earnings report. Benzinga's outlook for Archer-Daniels Midland 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 Archer-Daniels Midland management projections, analysts predict EPS of $0.69 on revenue of $16.72 billion. Archer-Daniels Midland reported a per-share profit of $0.77 when it published results during the same quarter last year. Sales in that period totaled $16.73 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.

If the company were to match the consensus estimate when it reports Thursday, EPS would have fallen 10.39%. Revenue would be down 0.04% on a year-over-year basis. Here is how the Archer-Daniels Midland's reported EPS has stacked up against analyst estimates in the past:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019EPS Estimate 0.51 0.55 0.71 0.72EPS Actual 0.85 0.64 1.42 0.77Revenue Estimate 16.00 B 15.71 B 16.50 B 16.09 BRevenue Actual 16.28 B 14.97 B 16.33 B 16.73 B

Stock Performance

Shares of Archer-Daniels Midland were trading at $50.36 as of October 27. Over the last 52-week period, shares are up 20.79%. Given that these returns are generally positive, long-term shareholders are probably content going into this earnings release.

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