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 ?
Based on the revised guidance for the 2006 fourth quarter, ICT GROUP expects that revenue for full year 2006 will be approximately $447 million, inclusive of the Proyectar acquisition and that diluted earnings per share will range from $1.
As previously announced, Mobile Mini expects 2006 pro forma EBITDA of between $118 million and $119 million and pro forma diluted earnings per share in the $1.
Fiscal 2006 diluted earnings per share are currently estimated in the range of $0.
The tax benefit will have no impact on the company's reported income and diluted earnings per share from continuing operations and cash flow from continuing operations.
This press release contains forward-looking statements, including, but not limited to, statements relating to expected income and diluted earnings per share from discontinued operations, expected income and diluted earnings per share from continuing operations excluding special charges and gain on sale of assets, cash flow from operations, and expected tax benefits.
Ecolab previously announced it expected diluted earnings per share in the $0.
01 per share tax charge related to the reinvestment of foreign earnings under AJCA, Ecolab expects diluted earnings per share in the $0.