Benzinga | Feb 17, 2021 10:06AM EST

A Preview Of Arista Networks's Earnings

Arista Networks (NYSE:ANET) announces its next round of earnings this Thursday, February 18. Here is Benzinga's look at Arista Networks'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

Arista Networks earnings will be near $2.39 per share on sales of $628.93 million, according to analysts. Arista Networks EPS in the same period a year ago totaled $2.29. Sales were $552.55 million.

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

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, earnings would be up 4.37%. Sales would be up 13.82% on a year-over-year basis. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020EPS Estimate 2.21 1.95 1.81 2.10EPS Actual 2.42 2.11 2.02 2.29Revenue Estimate 581.33 M 529.73 M 517.86 M 550.98 MRevenue Actual 605.43 M 540.57 M 523.03 M 552.55 M

Stock Performance

Shares of Arista Networks were trading at $319.08 as of February 16. Over the last 52-week period, shares are up 37.51%. Given that these returns are generally positive, long-term shareholders should be satisfied going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Arista Networks is scheduled to hold the call at 16:30:00 ET and can be accessed here.