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Earnings

   Also found in: Dictionary/thesaurus, Medical, Legal, Encyclopedia, Wikipedia, Hutchinson 0.01 sec.
Earnings
Net income for the company during a period.

earnings
The income of a business. Earnings usually refers to aftertax income but may occasionally be used synonymously with pretax income or even revenues.

Earnings. Corporate earnings are a company's profits after expenses have been paid. Earnings history is one of the key indicators that fundamental analysts use to evaluate a company.

However, there are several ways to report earnings. The broadest is reported earnings, which is defined by generally accepted accounting principles (GAAP). Others include pro forma earnings, EBITDA, free cash flow, and core earnings. Each method produces different results because of the data that is included in the calculation.

The variations make it difficult to make meaningful comparisons among the earnings of different companies, an issue that Standard & Poor's was addressing in developing the concept of core earnings.

Your earnings, on the other hand, include salary and other compensation for work you do, as well as income from assets you own, such as interest, dividends, and capital gains.


Earnings

What Does Earnings Mean?

The amount of profit a company produces during a specific period; usually presented on a quarterly (three calendar months) or annual basis. Earnings typically refers to after-tax net income. Ultimately, a business's earnings are the main determinant of its share price, because earnings and the circumstances relating to them can indicate whether the business will be profitable and successful in the long run.

Investopedia explains Earnings

Earnings are perhaps the single most studied number in a company's financial statements because earnings reveal a company's profitability. A business's quarterly and annual earnings typically are compared with the company's and analysts' estimates. In most cases, when earnings do not meet either of those estimates, the company's stock price will drop. In contrast, when they beat estimates, the share price can surge.

Related Terms:
Balance Sheet
Earnings before Interest, Taxes, Depreciation, and AmortizationEBITDA
Earnings per ShareEPS
Net IncomeNI
Pro Forma



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