EPS = Net Income / Shares Outstanding. It's the most watched number in every quarterly earnings report. Whether a company beats or misses EPS estimates -- and what they say about the future -- drives some of the largest single-day stock moves.
Revenue: total sales -- is the business growing?
EPS: profit per share -- is it profitable?
Guidance: what management expects next quarter/year -- often more important
than the current quarter's numbers.
Margins: gross and operating margin -- is profitability improving?
Key metrics: MAU, ARR, units shipped -- varies by industry.
Beat: actual EPS > analyst consensus estimate.
-> Usually causes gap-up; size depends on guidance and margins.
Miss: actual EPS < analyst consensus estimate.
-> Usually causes gap-down; severity depends on guidance.
In-line: meets estimates exactly -- often disappointing if priced for a beat.
A company can beat earnings but guide lower and the stock falls 15%.
It can miss earnings but raise guidance and the stock jumps 10%.
Always read the press release for management's outlook, not just the headline EPS number.
Related: Pre-Earnings Drift • P/E Ratio -- Price-to-Earnings • Gap Up & Gap Down