Benzinga | Feb 8, 2021 10:18AM EST

Earnings Outlook for Two Harbors Investment

Two Harbors Investment (NYSE:TWO) announces its next round of earnings this Tuesday, February 09. Here is Benzinga's everything-that-matters guide for this Tuesday's Q4 earnings announcement.

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

Analysts predict Two Harbors Investment will report earnings of $0.23 per share on revenue of $59.65 million. In the same quarter last year, Two Harbors Investment reported EPS of $0.25 on revenue of $71.15 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.

The analyst consensus estimate would represent a 8.0% decline in the company's EPS figure. Revenue would be down 16.17% from the year-ago period. Two Harbors Investment's reported EPS has stacked up against analyst estimates in the past like this:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020EPS Estimate 0.24 0.13 0.29 0.36EPS Actual 0.28 -0.05 0.25 0.25Revenue Estimate 61.25 M 44.49 M 62.66 M 62.50 MRevenue Actual 60.53 M 45.21 M 88.20 M 71.15 M

Stock Performance

Shares of Two Harbors Investment were trading at $6.45 as of February 05. Over the last 52-week period, shares are down 57.11%. 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. Two Harbors Investment is scheduled to hold the call at 09:00:00 ET and can be accessed here.