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Tickers in this Article: VTR
On Friday, October 26, 2012, Ventas (NYSE:VTR) will report its third quarter earnings.

A business' earnings are the main determinant of its share price because earnings and the circumstances relating to them can indicate whether the business will be profitable and successful in the long run. SEE: Earnings: Quality Means Everything

What to Expect: The consensus estimate for Ventas' earnings is 93 cents per share, up 5.7% from a year ago when the company reported earnings of 88 cents per share.

While down from 94 cents three months ago, the consensus estimate has remained unchanged over the past 30 days. Analysts are expecting earnings of $3.72 per share for the fiscal year.

Revenue is expected to exceed last year's figure of $566.1 million by 11.2% and come in at $629.8 million for the quarter. The anticipated revenue for the fiscal year is $2.43 billion.

Company Performance: Revenue increases have been in the double digits for the past four quarters. It has risen by an average of more than twofold, with the biggest increase of more than twofold coming in the first quarter.

Compared to the industry average of 14.57, VTR's P/E ratio of 38.4 is quite high. Usually, if a stock has a high P/E ratio, it indicates that the market expects the company to grow earnings quickly in the future. The price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: Profit With The Power Of Price-To-Earnings

Since July 25, 2012, the stock price has dipped 1.3% to $64.51 from $65.37. Ventas' best recent streak was when its price gained $2.80 per share between August 23, 2012 and September 6, 2012.

The Competition: Ventas is a real estate investment trust, with a portfolio of seniors housing and healthcare properties. Eight of 14 analysts rate Ventas a hold. They have become increasingly pessimistic about the stock, as the number of buy ratings has dropped slightly over the last three months.

The company's closest competitor in the real estate operations industry is HCP (HCP). Analysts are more optimistic about Ventas than about HCP. Only three out of 15 analysts rate the latter a buy compared to five of 14 for the former.

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