Benzinga | May 26, 2021 10:17AM EDT

Earnings Preview for Costco Wholesale

Costco Wholesale (NASDAQ:COST) will be releasing its next round of earnings this Thursday, May 27. For all of the relevant information, here is your guide for Thursday's Q3 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 Costco Wholesale will report earnings of $2.34 per share on revenue of $43.64 billion. Costco Wholesale EPS in the same period a year ago totaled $1.89. Sales were $37.27 billion.

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 when it reports Thursday, EPS would be up 23.81%. Sales would be up 17.1% on a year-over-year basis. Here is how the company's reported EPS has compared to analyst estimates in the past: Quarter Q2 2021 Q1 2020 Q4 2020 Q3 2020EPS Estimate 2.45 2.05 2.83 2.04EPS Actual 2.14 2.29 3.13 1.89Revenue Estimate 43.78 B 42.41 B 52.08 B 37.52 BRevenue Actual 44.77 B 43.21 B 53.38 B 37.27 B

Stock Performance

For a full 12 months, the return has risen by 25.01%. Given that these returns are generally positive, long-term shareholders are probably relaxed 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. Costco Wholesale is scheduled to hold the call at 07:00:00 ET and can be accessed here.