Earnings Per Share (EPS)

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newratings.com  Oct 23  Comment 
INDIANAPOLIS (dpa-AFX) - Eli Lilly and Co. (LLY) reported a sharp fall in third-quarter 2014 net income to $500.6 million, or $0.47 per share, from $1.20 billion, or $1.11 per share, last year, hurt by lower operating income. On a non-GAAP basis,...
SeekingAlpha  Oct 23  Comment 
StreetInsider.com  Oct 22  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/Boulder+Brands+%28BDBD%29+Stock+Plunges%3B+Cuts+Q3%2C+Q4+EPS+Expectations/9931450.html for the full story.
newratings.com  Oct 22  Comment 
NORWALK (dpa-AFX) - Xerox (XRX) reported 7% lower third-quarter net income attributable to the company of $266 million, versus $286 million last year. On the other hand, quarterly total earnings per share were $0.22, same as last year. On an...
StreetInsider.com  Oct 22  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/Federal-Mogull+%28FDML%29+Misses+Q3+EPS+by+13c/9930525.html for the full story.
TechCrunch  Oct 21  Comment 
 With all eyes on what Yahoo will do with its $5 billion+ in Alibaba cash, Yahoo today reported its Q3 earnings after the close of trading, with sales of $1.09 billion excluding traffic acquisition costs and non-GAAP earnings per share of $0.52....




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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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