Preview: Bank of New York Mellon’s Earnings

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On Wednesday, January 20, Bank of New York Mellon (NYSE:BK) will release its latest earnings report. Benzinga’s report can help you figure out the ins and outs of the earnings release.

Net Income, Earnings, 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

Wall Street expects EPS of $0.91 and sales around $3.83 billion. In the same quarter last year, Bank of New York Mellon reported earnings per share of $1.01 on sales of $3.99 billion.

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.

If the company were to match the consensus estimate when it reports Wednesday, EPS would have fallen 9.9%. Revenue would be down 3.96% from the year-ago period. Here is how the company’s reported EPS has compared to analyst estimates in the past:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020
EPS Estimate 0.94 0.91 0.88 1
EPS Actual 0.98 1.01 1.05 1.01
Revenue Estimate 3.83 B 3.89 B 3.85 B 3.94 B
Revenue Actual 3.85 B 4.01 B 4.11 B 3.99 B

Stock Performance

Shares of Bank of New York Mellon were trading at $45.585 as of January 18. Over the last 52-week period, shares are down 2.33%. Given that these returns are generally negative, long-term shareholders are likely unhappy going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Bank of New York Mellon is scheduled to hold the call at 08:00:00 ET and can be accessed here.

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