Earnings per share (EPS) is a key profitability metric that expresses how much net profit a company generated for each share of its stock. It is calculated by dividing net profit (after tax) by the weighted average number of ordinary shares in circulation during the reporting period.
Basic EPS uses the simple share count, while diluted EPS factors in the potential exercise of share options, warrants, and convertible instruments. Diluted EPS is generally the more conservative and widely scrutinised figure.
EPS growth over time is one of the strongest indicators of a company's ability to create shareholder value. A company consistently growing EPS is typically rewarded with a rising share price, all else being equal.
Listed companies on the CSE are required to publish interim financial results quarterly and audited full-year results annually, both of which include EPS figures. These announcements are often the key triggers for share price moves in the days surrounding their release.