Earnings Per Share (EPS)

RECENT NEWS
Reuters  Feb 26  Comment 
* Says acquisition of UIL Holdings Corp to have positive impact on earnings per share and cash flow
Forbes  Feb 25  Comment 
Analysts have become increasingly bullish on Gap in the month leading up to the company's fourth-quarter earnings announcement scheduled for Thursday, February 26, 2015. The consensus earnings per share estimate has moved up from 68 cents a share...
Yahoo  Feb 24  Comment 
Hewlett-Packard revealed fiscal first-quarter profits that narrowly beat views, but sales lagged amid weakness in its commercial division.
Benzinga  Feb 24  Comment 
Below are the top gaming activities stocks on the NYSE and the NASDAQ in terms of EPS growth forecast for the next year. Iao Kun Group Holding Company Limited (NASDAQ: IKGH) earnings per share growth forecast for the next year is 400.00%. Iao...
Benzinga  Feb 23  Comment 
In a report published Friday, DA Davidson analyst Mark Kelleher commented that Nimble Storage, Inc. (NYSE: NMBL) continues to operate in a highly competitive environment and faces headwinds from being one of the most aggressive companies in...
Wall Street Journal  Feb 21  Comment 
State Street said it was revising its fourth-quarter earnings per share lower after the bank increased reserves to cover the potential resolution of some claims related to foreign-exchange activities.
Forbes  Feb 20  Comment 
Morgan Stanley's Tesla analyst cut his EPS projections again but is still positive on the shares. This note outlines his EPS cuts.
Forbes  Feb 20  Comment 
Analysts have become increasingly bearish on Cracker Barrel Old Country StoreĀ in the month leading up to the company's second-quarter earnings announcement scheduled for Tuesday, February 24, 2015. The consensus analyst estimate has moved from...




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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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