Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: Re: [CANSLIM] Newbie question - Definition of Earnings
Date: Thu, 30 May 2002 22:51:36 -0500
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Hi Tom,
You're absolutely right and I already caught the error in my example =
earlier today and posted a correction...somehow what was in my brain and =
what ended up in the example didn't match....probably further down in =
your in box!!!
Katherine
Here's the always eloquent Emily Dickenson on "senior moments"...
I felt a clearing in my mind
As if my brain had split;
I tried to match it, seam by seam,
But could not make them fit.
The thought behind I strove to join
Unto the thought before,
But sequence ravelled out of reach
Like balls upon the floor.
----- Original Message -----=20
From: Tom Worley=20
To: canslim@lists.xmission.com=20
Sent: Thursday, May 30, 2002 10:45 PM
Subject: Re: [CANSLIM] Newbie question - Definition of Earnings
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.
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<BODY bgColor=3D#ffffff>
<DIV>Hi Tom,</DIV>
<DIV> </DIV>
<DIV>You're absolutely right and I already caught the error in my =
example=20
earlier today and posted a correction...somehow what was in my brain and =
what=20
ended up in the example didn't match....probably further down in your in =
box!!!</DIV>
<DIV> </DIV>
<DIV>Katherine</DIV>
<DIV> </DIV>
<DIV>Here's the always eloquent Emily Dickenson on "senior =
moments"...</DIV>
<DIV> </DIV>
<DIV>I felt a clearing in my mind<BR>As if my brain had split;<BR>I =
tried to=20
match it, seam by seam,<BR>But could not make them fit.<BR><BR>The =
thought=20
behind I strove to join<BR>Unto the thought before,<BR>But sequence =
ravelled out=20
of reach<BR>Like balls upon the floor.<BR></DIV>
<BLOCKQUOTE dir=3Dltr=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=3Dstkguru@bellsouth.net =
href=3D"mailto:stkguru@bellsouth.net">Tom=20
Worley</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 =
10:45=20
PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] Newbie =
question -=20
Definition of Earnings</DIV>
<DIV><BR></DIV>
<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=20
becomes 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=20
company has bought back a lot of shares during the current quarter, =
thus=20
inflating the earnings per share as fewer shares now outstanding. For =
this=20
reason, I always look at earnings both in terms of total money, as =
well as=20
earnings per share. It 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=20
of shares early in the current quarter, it might make earnings per =
share look=20
weak due the weighted average shares outstanding in latest=20
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>=
=20
</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=20
Development 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></BLOCKQUOTE></BODY></HTML>
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Next in Thread: RE: [CANSLIM] Newbie question - Definition of Earnings "Fred Richards"
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