Earnings Per Share (EPS)

RECENT NEWS
Benzinga  Sep 30  Comment 
McCormick & Company, Incorporated (NYSE: MKC) delivered better than expected EPS and inline revenue for the third quarter. The company boosted its full year adjusted EPS forecast and sees revenue at the upper end of earlier forecast. The...
newratings.com  Sep 29  Comment 
NEW YORK CITY (dpa-AFX) - Philip Morris International Inc. (PM) revised for currency only, and narrowed, its 2016 full-year reported EPS forecast to a range of $4.53 to $4.58, at prevailing exchange rates, compared to $4.42 in 2015. Excluding an...
newratings.com  Sep 28  Comment 
WASHINGTON (dpa-AFX) - Moody's Corp. (MCO) said that it raised its GAAP earnings per share outlook for the full year ending December 31, 2016. Full year 2016 GAAP earnings per share is currently expected to be in the range of $4.70 to $4.80,...
newratings.com  Sep 28  Comment 
PERTH (SCOTLAND) (dpa-AFX) - SSE plc (SSE.L) announced, for 2016/17 as a whole, the Group continues to expect a return to growth and adjusted EPS of at least 120 pence; for the first six months it is expecting adjusted EPS to be at least 33 pence....
newratings.com  Sep 28  Comment 
LONDON (dpa-AFX) - Stagecoach Group plc (SGC.L) said its expectation of the Group's adjusted earnings per share for the year ending 29 April 2017 has not changed from when it announced full year results in June 2016. However, the Group noted...
Benzinga  Sep 27  Comment 
Goldman Sachs sees risks to EPS upside from CBOE Holdings, Inc (NASDAQ: CBOE)'s $3.2 billion acquisition of Bats Global Markets Inc (BATS:BATS) from potential P/E de-rating. "Our hypothetical pro forma analysis suggests a potential deal would...




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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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