When Equity Residential (NYSE:EQR) releases its third quarter earnings on Wednesday, October 24, 2012, it is expected to report earnings that are up 22.6% from a year ago. The consensus estimate is 76 cents per share, up from earnings of 62 cents per share a year ago.

In most situations, when earnings do not meet analyst estimates, a business' stock price will tend to drop. On the other hand, when actual earnings beat estimates by a significant amount, the share price will likely surge. SEE: Can Earnings Guidance Accurately Predict The Future?

What to Expect: Over the past three months, this has increased from 71 cents. For the fiscal year, analysts are expecting earnings of $2.77 per share.

Equity Residential is expected to report revenue of $554.2 million for the quarter, beating last year's figure of $504.7 million by 9.8%. Equity Residential is expected to report revenue of $2.17 billion for the fiscal year.

Company Performance: Revenue has increased in the past three quarters. It hit $530.2 million in second quarter, a 8.4% increase. Previously, revenue went up 0.4% in the first quarter and 9.7% in the fourth quarter of the last fiscal year.

The past eight quarters have represented an increase in profit for the company; for the last four, it has seen an average of 40.4% growth in profit year-over-year.

EQR has a P/E ratio of 169.1, high compared to the industry average of 18.09. This could mean that the market is expecting big things over the next few months or years. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. To determine the P/E ratio, an investor divides the market price of the stock by the earnings-per-share (EPS) of the stock. SEE: How To Use The P/E Ratio And PEG To Tell The Future Of A Stock

The stock price has fallen 10.1% to $57.48 from $63.95 since July 23, 2012. Equity Residential's best recent streak was when its price gained $1.95 per share between August 14, 2012 and August 23, 2012.

The Competition: Equity Residential is a real estate investment trust company that acquires and manages apartment properties in top growth markets in the United States. The company's closest competitor in the real estate operations industry, Avalonbay (AVB), will report earnings on October 24, 2012. Analysts are expecting earnings of $1.40 per share for Avalonbay, up 19.7% from last year's earnings of $1.17 per share. Analysts are less optimistic about Equity Residential than about Avalonbay. Eight out of 16 analysts rate the latter a buy compared to five of 17 for the former.

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Tickers in this Article: EQR

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