Earnings Per Share (EPS)

Benzinga  Dec 1  Comment 
Mattress Firm Holding Corp (NASDAQ: MFRM) announced Monday its financial results for the third fiscal quarter ended October 28, 2014. Net sales increased 42.3 percent to $464.3 million, above estimates of $431.01 million, reflecting...
Benzinga  Dec 1  Comment 
Below are the top specialty eateries stocks on the NYSE and the NASDAQ in terms of EPS growth forecast for the next five years. Potbelly (NASDAQ: PBPB) earnings per share growth forecast for the next five years is 24.00%. Potbelly's...
The Economic Times  Nov 30  Comment 
Among Nifty stocks, there were 14 upgrades and 32 downgrades. The earning estimates of companies such as Tata Motors, Maruti Suzuki and Sun Pharma have been upgraded signifi cantly.
Benzinga  Nov 20  Comment 
BZ NOTE: In 8-K Filing Company Says It Sees 2015 Adj. EPS Benefits 7.5% From Deal For 2916 The Company Says CPBO Deal Should Add 11.7& To Adj. EPS   Link to slides on...
newratings.com  Nov 19  Comment 
WASHINGTON (dpa-AFX) - Cloud computing company Salesforce (CRM) Wednesday reported third-quarter net loss of $38.9 million or $0.06 per share compared with a loss of $124.4 million or $0.21 per share last year. Excluding items, adjusted earnings...


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Earnings per share is a company's total earnings divided by the total number of shares outstanding. It is calculated using annual earnings, usually after interest and taxes and after deducting the preference shares dividends, so as to compute the portion of total profit which is attributable to the ordinary shareholders. In this case, total earnings would be divided by the total number of ordinary shares outstanding.

There are three types of EPS numbers:

  1. a trailing EPS (calculated using the previous year's earnings),
  2. a current EPS (uses the current year), and
  3. forward EPS (a projection for the coming year).

Moreover, different accounting policies regarding the handling of new issue of ordinary shares, have led to the need of several computation approaches to the EPS ratio, in order to reflect in the best way possible the appropriate information for the users-stakeholders of the firm being analyzed. For this reason, there is the computation of the Basic EPS, the EPS Adjusted reflecting any bonus issue or rights issue or option/warrants exercise and the Diluted EPS - DEPS which reflects the convertible bonds or shares to ordinary shares (the approaches are being determined by the accounting policies in effect). Existing shareholders can look at the DEPS to see the effect on current profitability of commitments already entered into to issue ordinary shares in the future.

What is important, is that very often EPS is used as a considerable tool-indicator of a firm's performance. It measures performance from the perspective of investors and potential investors.Additionally, it shows the amount of earnings available to each ordinary shareholder, so that it indicates the potential return on individual investments. These results can be achieved by comparing the EPS of either different entities or the same entity's in different accounting periods, or even better, using both. Sometimes, the trend in EPS may be more accurate performance indicator than the trend in profit, though it is based on profit on ordinary activities after taxation.

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