Earnings Per Share (EPS)

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SeekingAlpha  Jan 29  Comment 
newratings.com  Jan 29  Comment 
WASHINGTON (dpa-AFX) - IDEXX Laboratories, Inc. (IDXX) announced, for 2016, the company now expects EPS in the range of $2.10 - $2.17; and revenue in a range of $1.69-$1.71 billion. The company increased its EPS guidance to reflect the permanent...
newratings.com  Jan 29  Comment 
WASHINGTON (dpa-AFX) - Home appliances giant Whirlpool Corp. (WHR) Friday said it expects 15 percent growth in earnings per share for 2016, after it reported a fourth-quarter profit that more than doubled from last year. The company expects GAAP...
SeekingAlpha  Jan 28  Comment 
TechCrunch  Jan 28  Comment 
 Microsoft today reported earnings for its second financial quarter of 2016 (I know, that’s weird, but Microsoft’s financial year ends in June). The company reported non-GAAP revenue of $25.7 billion for the last quarter and $0.78 of adjusted...
newratings.com  Jan 28  Comment 
WASHINGTON (dpa-AFX) - L-3 Communications Holdings, Inc. (LLL) announced, for 2016, the company expects its earnings per share to be in the range of $7.40 to $7.60, up from prior guidance range of $6.90 to $7.10. The company continues to expect...




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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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