What is earnings per share (EPS)?

Earnings per share (EPS): A company's profit divided by its number of shares. At quarterly results it is compared with what analysts expected.

EPS stands for earnings per share. You take a company's net profit and divide it by the number of shares. That shows how much profit belongs to each share.

At quarterly results the market mainly looks at whether EPS is higher or lower than analysts expected. A few cents of difference can move the share price a lot.

EPS can also rise when a company buys back its own shares. There are fewer shares, while the profit stays the same.

Example
A company makes a profit of 50 million euros and has 10 million shares. Earnings per share are 5 euros. If analysts expected 5.20 euros, the result falls short by 20 cents per share.

Watch out
Profit is an accounting figure and one-off items can push it up or down. Revenue and cash flow help to see the full picture.

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