Go to Jeff Salisbury LWGate Home Page.From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] Newbie question - Definition of Earnings
Date: Thu, 30 May 2002 23:45:29 -0400
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This is a multi-part message in MIME format. - ------=_NextPart_000_0166_01C20834.143EB250 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable sorry, Katherine, you don't make many mistakes. If there was a split = effective during the quarter, then the earnings per share of the prior = quarters are all adjusted to a split based level, so prior quarter = becomes 50 cents to compare to latest .625 a better example is where the company has bought back a lot of shares = during the current quarter, thus inflating the earnings per share as = fewer shares now outstanding. For this reason, I always look at earnings = both in terms of total money, as well as earnings per share. It can = sometimes make a big difference.=20 Likewise, if there was a new issue of shares early in the current = quarter, it might make earnings per share look weak due the weighted = average shares outstanding in latest quarter. - ----- Original Message -----=20 From: Katherine Malm=20 To: canslim@lists.xmission.com=20 Sent: Thursday, May 30, 2002 3:05 PM Subject: Re: [CANSLIM] Newbie question - Definition of Earnings Hi Kelly, Earnings and revenues are always measured on a per share basis so as to = compare apples to apples. This is important, because the company may = have increased/decreased the number of shares outstanding from one time = period to the next, then each individual share's piece of the pie will = be different. Example: Total Earnings/Net Income quarter 1: $10m Total Earnings/Net Income quarter 2: $12.5m +25 % , right? Add the following outstanding share info: Total Earnings/Net Income quarter 1 =3D $10m. Shares =3D 10m = Earnings per share =3D $1/share Company has a 2 for 1 split during the quarter, so Total Earnings/Net Income quarter 2 =3D $12.5m Shares =3D 20m = Earnings per share =3D $0.625/share Growth in earnings per share QoQ =3D NEGATIVE 37.5%! Also be sure to visit www.investors.com/learn to find answers to = questions like this. Katherine ----- Original Message -----=20 From: Kelly Short=20 To: canslim@lists.xmission.com=20 Sent: Thursday, May 30, 2002 1:45 PM Subject: [CANSLIM] Newbie question - Definition of Earnings IBD's Top 20 Investing Tips includes the following two points on which = I'm confused: 1. Consider buying stocks with each of last three years' earnings up = 25% or more, ROE of 17%+ and recent earnings and sales accelerating. 2. Recent quarterly earnings and sales should be up 25% or more. When they say "earnings" do they mean earnings per share or sales, net = income, or other number? I would greatly appreciate input on this = obviously newbian question. Kelly Short Business Development Manager Neoris, Inc. (817) 731-0995 mailto:kelly.short@neoris.com http://www.neoris.com - -To subscribe/unsubscribe, email "majordomo@xmission.com" -In the email body, write "subscribe canslim" or -"unsubscribe canslim". Do not use quotes in your email. - ------=_NextPart_000_0166_01C20834.143EB250 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable <!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> <HTML><HEAD> <META http-equiv=3DContent-Type content=3D"text/html; = charset=3Diso-8859-1"> <META content=3D"MSHTML 6.00.2716.2200" name=3DGENERATOR> <STYLE></STYLE> </HEAD> <BODY bgColor=3D#ffffff> <DIV><FONT face=3DArial>sorry, Katherine, you don't make many mistakes. = If there=20 was a split effective during the quarter, then the earnings per share of = the=20 prior quarters are all adjusted to a split based level, so prior quarter = becomes=20 50 cents to compare to latest .625</FONT></DIV> <DIV style=3D"FONT: 10pt arial"> </DIV> <DIV style=3D"FONT: 10pt arial"><FONT size=3D3>a better example is where = the company=20 has bought back a lot of shares during the current quarter, thus = inflating the=20 earnings per share as fewer shares now outstanding. For this reason, I = always=20 look at earnings both in terms of total money, as well as earnings per = share. It=20 can sometimes make a big difference. </FONT></DIV> <DIV style=3D"FONT: 10pt arial"><FONT size=3D3></FONT> </DIV> <DIV style=3D"FONT: 10pt arial"><FONT size=3D3>Likewise, if there was a = new issue of=20 shares early in the current quarter, it might make earnings per share = look weak=20 due the weighted average shares outstanding in latest = quarter.</FONT></DIV> <DIV style=3D"FONT: 10pt arial"><FONT size=3D3></FONT> </DIV> <DIV style=3D"FONT: 10pt arial">----- Original Message -----=20 <DIV style=3D"BACKGROUND: #e4e4e4; font-color: black"><B>From:</B> <A=20 title=3Dkmalm@earthlink.net = href=3D"mailto:kmalm@earthlink.net">Katherine Malm</A>=20 </DIV> <DIV><B>To:</B> <A title=3Dcanslim@lists.xmission.com=20 href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>= </DIV> <DIV><B>Sent:</B> Thursday, May 30, 2002 3:05 PM</DIV> <DIV><B>Subject:</B> Re: [CANSLIM] Newbie question - Definition of=20 Earnings</DIV></DIV> <DIV><BR></DIV> <DIV>Hi Kelly,</DIV> <DIV> </DIV> <DIV>Earnings and revenues are always measured on a per share basis so = as to=20 compare apples to apples. This is important, because the company may = have=20 increased/decreased the number of shares outstanding from = one time=20 period to the next, then each individual share's piece of the pie will = be=20 different.</DIV> <DIV> </DIV> <DIV>Example:</DIV> <DIV>Total Earnings/Net Income quarter 1: $10m</DIV> <DIV>Total Earnings/Net Income quarter 2: $12.5m</DIV> <DIV>+25 % , right?</DIV> <DIV> </DIV> <DIV>Add the following outstanding share info:</DIV> <DIV>Total Earnings/Net Income quarter 1 =3D=20 $10m. Shares =3D = 10m =20 Earnings per share =3D $1/share</DIV> <DIV>Company has a 2 for 1 split during the quarter, so</DIV> <DIV>Total Earnings/Net Income quarter 2 =3D=20 $12.5m Shares =3D=20 20m Earnings per share =3D $0.625/share</DIV> <DIV> </DIV> <DIV>Growth in earnings per share QoQ =3D NEGATIVE 37.5%!</DIV> <DIV> </DIV> <DIV>Also be sure to visit <A=20 href=3D"http://www.investors.com/learn">www.investors.com/learn</A> to = find=20 answers to questions like this.</DIV> <DIV> </DIV> <DIV>Katherine</DIV> <BLOCKQUOTE=20 style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; = BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px"> <DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV> <DIV=20 style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: = black"><B>From:</B>=20 <A title=3Dkelly.short@neoris.com = href=3D"mailto:kelly.short@neoris.com">Kelly=20 Short</A> </DIV> <DIV style=3D"FONT: 10pt arial"><B>To:</B> <A = title=3Dcanslim@lists.xmission.com=20 = href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>= </DIV> <DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Thursday, May 30, 2002 = 1:45=20 PM</DIV> <DIV style=3D"FONT: 10pt arial"><B>Subject:</B> [CANSLIM] Newbie = question -=20 Definition of Earnings</DIV> <DIV><BR></DIV>IBD's Top 20 Investing Tips includes the following two = points=20 on which I'm confused:<BR>1. Consider buying stocks with each of last = three=20 years' earnings up 25% or more, ROE of 17%+ and recent earnings and = sales=20 accelerating.<BR>2. Recent quarterly earnings and sales should be up = 25% or=20 more.<BR>When they say "earnings" do they mean earnings per share or = sales,=20 net income, or other number? I would greatly appreciate input on = this=20 obviously newbian question.<BR><BR><BR>Kelly Short<BR><BR>Business = Development=20 Manager<BR>Neoris, Inc.<BR>(817) 731-0995<BR><A=20 = href=3D"mailto:kelly.short@neoris.com">mailto:kelly.short@neoris.com</A><= BR><A=20 = href=3D"http://www.neoris.com">http://www.neoris.com</A><BR><BR><BR>-<BR>= - -To=20 subscribe/unsubscribe, email "<A=20 = href=3D"mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>-In= the=20 email body, write "subscribe canslim" or<BR>-"unsubscribe = canslim". Do=20 not use quotes in your email.</BLOCKQUOTE></BODY></HTML> - ------=_NextPart_000_0166_01C20834.143EB250-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email.
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