This earnings per share calculator computes basic EPS — (net income − preferred dividends) ÷ weighted average common shares — the per-share profit figure behind every P/E ratio and earnings headline.

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The Profit Figure With a Per-Share Denominator

EPS becomes a valuation when divided into price — our P/E Ratio Calculator. Part of our Finance Calculators collection.

Worked Example (Verified)

  • Net income $10M, preferred dividends $1M, 3M shares (defaults): (10 − 1)/3 = EPS $3.00 — preferred holders are paid before common shareholders enter the EPS story, hence the subtraction
  • Buyback physics: same $9M over 2.7M shares (10% bought back) = $3.33 EPS — EPS “growth” of 11% with zero business improvement; the denominator is a management lever, read it alongside net income
  • Trailing vs forward EPS: headlines mix realized (TTM) and analyst-forecast numbers — the P/E you compute depends entirely on which EPS you feed it

EPS Discipline

  • GAAP vs adjusted (“non-GAAP”) EPS: companies exclude items they call one-time with suspicious regularity — compare both, trust the stricter trend.
  • Diluted is the conservative denominator (treasury-stock method for options); in loss years dilution anti-dilutes and the two figures converge.
  • EPS growth from buybacks is real per-share value creation only when shares were repurchased below intrinsic value — arithmetic alone can’t tell you.
  • Stock splits restate all historical EPS (2-for-1 halves every past EPS) — charts that don’t restate are lying by omission.

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Frequently Asked Questions

How do you calculate earnings per share?

Basic EPS = (net income − preferred dividends) ÷ weighted average common shares outstanding. Example: ($10,000,000 − $1,000,000) ÷ 3,000,000 = $3.00. Preferred dividends come out first because those shareholders have a prior claim on earnings.

Why weighted average shares?

Because share counts change mid-year (issuance, buybacks, splits): a share that existed for 6 months earns half a year’s claim. Weighting by time outstanding keeps EPS comparable across periods — using the year-end count after a December buyback would fabricate EPS growth.

Basic vs diluted EPS — what’s the difference?

Diluted EPS assumes all dilutive securities (in-the-money options, warrants, convertibles) become shares, spreading earnings over more units — so diluted ≤ basic. Profitable companies must report both; the diluted figure is the one valuation should use.

Can EPS be negative?

Yes — a net loss produces negative EPS (a loss per share), and P/E ratios become meaningless (reported as “NM” or negative). Preferred dividends still subtract in loss years, deepening the per-share loss.

What is a good EPS?

EPS has no absolute scale — a $3 EPS means nothing without the share price (that’s P/E’s job) and the trend (growth rate). Compare a company’s EPS against its own history and sector peers, using diluted, GAAP-consistent numbers.

Is this EPS calculator free?

Yes — free, instant, no sign-up.