If I have a number of stock shares and that company reports earnings of X amount per share, do I receive those earnings?

By Investopedia Staff AAA
A:

Simply?

Yes and no.

Part of the answer to your question is "no" because when a company reports $X of earnings per share in a quarter, the company is not declaring a dividend to its investors - it is publicizing how profitable it was for the last quarter. If it reported a losing quarter (negative EPS), the company naturally wouldn't request that you pay it back some money. Similarly, it won't pay you when it reports a profitable quarter. The only time you receive money directly from the company is through a dividend. (To learn more about dividends, see How And Why Do Companies Pay Dividends?)

Also, part of the answer to your question is "yes" because a company's stock performance is determined by different factors such as supply and demand, investor perception and market sentiment - which are, at least in part, affected by earnings. For this reason, when a company reports a certain amount of earnings per quarter, the stocks that you already own should have risen for the increase in earnings (according to the efficient market hypothesis). In other words, a company reporting higher earnings means that it is now worth more, which means the market will realize the higher value in the price of the stock, indirectly increasing your stock's worth.

For more on earnings, see our article Everything You Need To Know About Earnings.

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