diluted earnings per share

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Diluted Earnings per Share

The earnings per share of a publicly-traded company calculated on the assumption that all convertible securities were exercised. That is, instead of considering only common stock currently in existence, the diluted EPS assumes that all securities such as stock options, convertible bonds, and anything else that can be changed into common stock is actually changed. The diluted EPS is useful for common shareholders because it represents the earnings one would receive in the worst possible situation. Many companies report both the basic EPS and the diluted EPS. The actual EPS usually falls between the two. See also: Dual Presentation.

diluted earnings per share

An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of common stock. Net income is adjusted for any changes that would occur because of the conversions. Diluted earnings per share is a particularly effective method of presenting earnings-per-share data for companies with complex capital structures. Compare basic earnings per share. See also dual presentation.

Diluted earnings per share.

In addition to reporting earnings per share, corporations must report diluted earnings per share. This accounts for the possiblity that all outstanding warrants and stock options are exercised, and all convertible bonds and preferred shares are exchanged for common stock.

Diluted earnings actually report the smallest potential earnings per common share that a company could have based on its current earnings. In theory, at least, knowing the diluted earnings could influence how much you would be willing to pay for the stock.

References in periodicals archive ?
The Company reiterated its net sales, Diluted EPS and Adjusted EBITDA guidance for the full year of 2018 which it previously provided on January 5, 2018.
As a result, the company is updating its outlook for the fourth quarter of 2017 and now expects adjusted diluted EPS to be in the range of USD2.
52, respectively, for the fourth quarter of 2015, as compared to basic and diluted EPS of USD0.
GAAP diluted EPS guidance for the full-year 2014 is USD2.
Any company with potential common shares has a complex capital structure and must disclose both basic and diluted EPS.
tax reform changes, PFG increases its Adjusted Diluted EPS outlook representing growth in a range of 24% to 30% to $1.
M2 EQUITYBITES-January 30, 2017-AbbVie posts higher adjusted diluted EPS of USD1.
Midsona AB (STO:MSONA) on Friday reported profit of SEK63m, or diluted EPS of SEK2.
55 diluted EPS in the fourth quarter of 2013, and up 48.
36 for 4Q13, as compared to basic and diluted EPS of USD 0.
Under the FASB's tentative conclusions, fully diluted EPS would be replaced with diluted EPS.