Benzinga | Jan 27, 2021 10:17AM EST

Earnings Preview: Ethan Allen Interiors

On Thursday, January 28, Ethan Allen Interiors (NYSE:ETH) will release its latest earnings report. Check out Benzinga's preview to understand the implications.

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 management's projections, Ethan Allen Interiors analysts model for earnings of $0.68 per share on sales of $178.80 million. In the same quarter last year, Ethan Allen Interiors announced EPS of $0.27 on revenue of $174.57 million.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

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 post earnings in line with the consensus estimate when it reports Thursday, EPS would be up 151.85%. Sales would be up 2.42% on a year-over-year basis. Here is how the company's reported EPS has compared to analyst estimates in the past:

Quarter Q1 2020 Q4 2020 Q3 2020 Q2 2020EPS Estimate 0.22 -0.54 0.06 0.26EPS Actual 0.36 -0.15 0.02 0.27Revenue Estimate 144.32 M 95.17 M 152.09 M 174.65 MRevenue Actual 151.06 M 91.57 M 149.77 M 174.57 M

Stock Performance

Over the last 52-week period, shares are up 45.27%. Given that these returns are generally positive, long-term shareholders can relax 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. Ethan Allen Interiors is scheduled to hold the call at 17:00:00 ET and can be accessed here.