Earnings Per Share (EPS)

RECENT NEWS
Benzinga  9 hrs ago  Comment 
In a report published Tuesday, Needham analyst Richard Kugele downgraded the rating on Nimble Storage, Inc. (NYSE: NMBL) from Strong Buy to Buy, while lowering the price target from $35 to $32. Although the company is expected to post strong F2Q...
newratings.com  11 hrs ago  Comment 
WASHINGTON (dpa-AFX) - Masco Corp. (MAS) Tuesday announced a 36 percent increase in second quarter adjusted earnings per share to $0.38. Operating profit was up 22 percent at $280 million. Income from continuing operations was $.38 per common...
newratings.com  12 hrs ago  Comment 
WHITEHOUSE STATION (dpa-AFX) - Merck (MRK) reported second quarter 2015 net income attributable to company of $687 million compared to $2.00 billion, a year ago. Earnings per share was $0.24 compared to $0.68. Non-GAAP earnings per share was...
SeekingAlpha  Jul 28  Comment 
newratings.com  Jul 27  Comment 
WASHINGTON (dpa-AFX) - Roper Technologies, Inc. (ROP) reported second-quarter net income of $171.3 million or $1.69 per share compared to $157.4 million or $1.56 per share, last year. Adjusted earnings per share was $1.70, for the quarter. On...
newratings.com  Jul 27  Comment 
PETAH TIKVA (dpa-AFX) - Teva Pharmaceutical Industries Ltd. (TEVA) Monday said its preliminary second-quarter non-GAAP earnings per share were $1.43, up 15 percent from last year. On average, 19 analysts polled by Thomson Reuters expected...




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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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