Benzinga | May 17, 2021 10:07AM EDT

Preview: iQIYI's Earnings

On Tuesday, May 18, iQIYI (NASDAQ:IQ) 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 areOn Tuesday, May 18, iQIYI (NASDAQ:IQ) 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

Sell-side analysts are expecting iQIYI's loss per share to be near $0.36 on sales of $1.18 billion. iQIYI reported a loss of $0.56 when it published results during the same quarter last year. Sales in that period totaled $1.10 billion.

Why Analyst Estimates And Earnings Surprises Are Important

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 report earnings in line when it publishes results Tuesday, quarterly profit would be up 35.71%. Sales would be up 7.27% from the year-ago period. Here is how the company's reported EPS has compared to analyst estimates in the past: Quarter Q4 2021 Q3 2020 Q2 2020 Q1 2020EPS Estimate -0.38 -0.40 -0.49 -0.56EPS Actual -0.32 -0.24 -0.28 -0.56Revenue Estimate 1.16 B 1.09 B 1.05 B 1.03 BRevenue Actual 1.10 B 1.10 B 1.00 B 1.10 B

Stock Performance

Shares of iQIYI were trading at $12.84 as of May 14. Over the last 52-week period, shares are down 27.52%. Given that these returns are generally negative, long-term shareholders are likely a little upset going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. iQIYI is scheduled to hold the call at 07:00:00 ET and can be accessed here.