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Earnings per share (EPS)

Net income divided by the number of shares. It shows how much of the profit belongs to each single share.

Simple example

A company makes $100 of profit and has 50 shares, so earnings per share are $2.00. If it doubles its share count to 100 and profit stays at $100, earnings per share drop to $1.00.

$2.00 per share$1.00 per share$100 profit ÷ 50 shares$100 profit ÷ 100 shares
Made-up numbers, for illustration only.

Related terms

Net incomeThe profit left after all costs, interest and taxes.Price-to-earnings ratio (P/E)Share price divided by earnings per share.DilutionNew shares make each existing share a smaller slice.