earnings per share
C1Formal, Technical, Financial
Definition
Meaning
A company's profit divided by the number of outstanding common shares, showing profitability on a per-share basis.
A key financial metric used by investors to evaluate a company's profitability, calculate the price-to-earnings ratio (P/E), and assess dividend-paying potential.
Linguistics
Semantic Notes
Always treated as a singular countable noun phrase, despite 'earnings' being plural. Often abbreviated to EPS.
Dialectal Variation
British vs American Usage
Differences
No significant differences in meaning or usage. The term is standard in both UK and US financial English.
Connotations
Identical technical and evaluative connotations in both markets.
Frequency
Equally high frequency in business/financial contexts in both UK and US English.
Vocabulary
Collocations
Grammar
Valency Patterns
The company reported [ADJECTIVE] earnings per share of [NUMBER].[COMPANY]'s earnings per share [VERB] to [NUMBER].Vocabulary
Synonyms
Strong
Neutral
Weak
Vocabulary
Antonyms
Phrases
Idioms & Phrases
- “Beat earnings per share estimates”
- “Miss on earnings per share”
Usage
Context Usage
Business
Essential term in corporate reporting, investment analysis, and equity research.
Academic
Used in finance and accounting textbooks, research papers on corporate valuation.
Everyday
Uncommon; used by investors or financially literate individuals discussing stocks.
Technical
A precisely defined accounting and financial analysis metric, subject to specific calculation standards (e.g., IFRS, GAAP).
Examples
By Part of Speech
verb
British English
- The results were underpinned by earnings per share climbing to 15p.
American English
- The stock surged after the company managed to earnings per share above $1.00.
adjective
British English
- The earnings-per-share figure is a crucial indicator for the board.
American English
- We focus on the earnings-per-share growth potential of our investments.
Examples
By CEFR Level
- The company's earnings per share was good last year.
- Investors were disappointed as the earnings per share fell short of market expectations.
- The analyst downgraded the stock, citing concerns over the sustainability of its forward earnings-per-share growth, which appears reliant on non-recurring gains.
Learning
Memory Aids
Mnemonic
Think of a PIE (earnings) being sliced into equal SHARES for the shareholders. Earnings Per Share tells you how big each shareholder's slice of the profit pie is.
Conceptual Metaphor
PROFIT IS A PORTION OF FOOD (divided into shares).
Watch out
Common Pitfalls
Translation Traps (for Russian speakers)
- Avoid translating 'earnings' as 'заработанный' (wages). Use 'прибыль на акцию'.
- Do not translate 'share' literally as 'доля' in a general sense; it specifically means 'акция' (stock share).
Common Mistakes
- Using a plural verb (e.g., 'earnings per share are...') – correct is 'earnings per share is...' as it's a single metric.
- Confusing 'basic' and 'diluted' EPS.
Practice
Quiz
What does 'diluted earnings per share' account for that 'basic earnings per share' does not?
FAQ
Frequently Asked Questions
No. EPS measures total profit per share. Dividend per share is the portion of that profit actually paid out to shareholders.
Yes, if the company reports a net loss, the EPS will be negative.
It provides a 'worst-case' profitability scenario by including the impact of all potential shares that could be created from options, warrants, and convertible securities.
There is no universal 'good' number. EPS is evaluated by comparing it to the company's past performance, analyst forecasts, and the EPS of competitors in the same industry.