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Tickers in this Article: VNO
In the lead up to Vornado Realty's (NYSE:VNO) announcement of its second quarter earnings on Monday, August 6, 2012 analysts' expectations have fallen over the past month to earnings of $1 per share from earnings of $1.12 per share.

Earnings are perhaps the single most studied number in a company's financial statements because they show a company's profitability.

SEE: 12 Things You Need To Know About Financial Statements

What to Expect:

This is a drop from the consensus estimate three months ago of $1.17. Analysts are expecting earnings of $5.03 per share for the fiscal year.

Company Performance:

Revenue has risen by an average more than fourfold in the last four quarters. The most significant increase took place in the third quarter of the last fiscal year, when it rose 1480.6% from the year-earlier quarter.

VNO has a P/E ratio of 35.8, high compared to the industry average of 14.06. A company with a high P/E ratio will eventually have to live up to the high rating by substantially increasing its earnings, or the price will need to drop. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall.

SEE: How To Find P/E And PEG Ratios

The stock price has fallen 4.2% since May 3, 2012, from $87.14 to $83.50.

The Competition:

Vornado Realty Trust is a real estate investment trust that conducts its business through Vornado Realty L.P.

Opinion about the stock has worsened recently, as buy ratings have dropped slightly over the last three months.

The company's closest competitor in the real estate operations industry is SL Green (SLG).

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