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MARKETS / GLOSSARY / DILUTED EARNINGS PER SHARE

Diluted earnings per share

Diluted earnings per share is the year's profit divided by the number of shares that would exist if every option, warrant and convertible were exercised. It is the conservative figure, and the one this site leads with.

Definition

How it is computed here

Formulanet income attributable to common shareholders ÷ weighted average diluted shares
UnitCurrency per share
PeriodOne fiscal year, as reported
SourceExtracted from SEC filings; every value on an asset page carries the accounting tag and the filing it came from
Identifierlpa_diluido
The inputs

What goes into the formula

Net income attributable to common shareholdersAfter removing what belongs to preferred shareholders and to minority interests.
Weighted average diluted sharesThe basic count plus every share that would come into existence if the instruments already granted were exercised: employee options, warrants, convertible bonds. Instruments that would RAISE earnings per share are excluded by the accounting rules, so the diluted figure is never higher than the basic one.

A formula without its inputs explained is decoration. Where an input is missing from a filing, the metric is left empty here rather than completed with a zero or an estimate.

Worked example

How to calculate diluted earnings per share, step by step

A company that pays part of its staff in stock.

Net income to common shareholders$2,400M
Weighted average basic shares1.00B
Options and convertibles outstanding0.06B
  1. Diluted share count = 1.00 + 0.06 = 1.06B.
  2. Diluted EPS = 2,400 ÷ 1,060 = $2.26.
  3. Against basic EPS of 2,400 ÷ 1,000 = $2.40.
  4. Dilution = 2.26 ÷ 2.40 − 1 = −5.8%.

Result: $2.26 per share, 5.8% below the basic figure

Almost six percent of the year's profit is already spoken for by people who do not own a share yet. Reading only the basic figure hides that entirely.

The figures in this example are illustrative and rounded — they are not a real company. The real figures on this site are the live ones below and on every asset page, each carrying the filing it came from.

Why it matters

What diluted earnings per share is good for

Diluted EPS is the number the market quotes and the number an owner should use, because it counts the claims that already exist rather than only the ones already exercised. For a company that pays heavily in stock, the gap between basic and diluted is a real transfer from shareholders to employees, and it recurs every year.

The limit

What this number does not tell you

EPS changes when the share count changes, so buybacks raise it without the business earning a cent more — an EPS series rising on a flat profit line is a story about ownership, not performance. Across a stock split the series is not comparable at all, and this site refuses to compute a change that crosses one. And because it is a per-share figure, it says nothing about size: a $2.26 EPS belongs equally to a giant and to a small company. Earnings per share and earnings can move in opposite directions, and here they do. Of the 4,695 companies with both years available, 346 report a higher diluted EPS in their most recent year than in the one before, while their net income fell over the same period. The share count did the work. Nothing about the business improved.

Every metric on this site is published with its blind spot stated. A figure without its limit is half a fact.

In the data

Highest reported diluted earnings per share

From the most recent fiscal year of each company. Only companies reporting in US dollars are ranked here — a figure in yen or won is not larger, it is in another currency.

On a real company

See it in a published filing

Their sectors

These pages show the figure across up to nineteen fiscal years, with the accounting tag and the filing behind every value.

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