Earnings per share (EPS) serves as an indicator of a company’s profitability. It is often considered to be one of the most important variables in determining a stock’s value, and it comprises the “E” part of the P/E (priceearnings) valuation ratio. EPS is calculated as:
EPS = net income / average outstanding common shares
There are three basic types of EPS numbers based on where the data comes from:
 Trailing EPS – based on the previous year’s number
 Current EPS – based on this year’s numbers, which are still projections
 Forward EPS – based on future numbers, which are projections
A trailing EPS uses the previous four quarters of earnings in its calculation, and has the benefit of using actual numbers instead of projections. Most price to earnings ratios (P/Es) are calculated using the trailing EPS because it represents what actually happened, and not what might happen. Although the figure is accurate, the trailing EPS is “old news” and many investors will also look at current and forward EPS figures.
The current EPS typically includes the four quarters of the current fiscal year, some of which may have already elapsed, and some of which are yet to come. As a result, some of the data will be based on actual figures and some will be based on projections.
A forward EPS is based purely on projections for some period of time in the future, typically the coming four quarters. Forward EPS estimates can be made by analysts or by the company itself. While this number is based on estimates and not facts, investors are often interested in forward EPS since they want to know about the future earning potential of a company.
Investors often compare the different EPS calculations. Investors, for example, may compare the forward EPS (projections) with the company’s actual earnings per share for the current quarter. If the actual EPS falls short of forward EPS projections, the stock price may fall. If the actual EPS beats estimates, however, the stock may experience a short rally.

What is the difference between forward p/e and trailing p/e?
Understand the difference between the trailing P/E ratio, which is the standard pricetoearnings calculation, and the forward ... Read Answer >> 
What is an alternative ratio to forward p/e?
Discover the most commonly used alternative equity evaluation ratio to the forward P/E ratio, and the relative advantages ... Read Answer >> 
What does the forward p/e indicate about a company?
Explore the forward price to earnings ratio and learn its significance and how it compares to the traditional price to earnings ... Read Answer >> 
How can I calculate the forward p/e of the S&P 500?
Learn how forward P/E is calculated for the S&P 500. Forward P/E is an important metric appropriate for changing market conditions. Read Answer >> 
Over what time period should I be looking at the forward rate?
Read about forward rates and forward prices, how they function, and which rates you should look at based on your own investment ... Read Answer >> 
What is the formula for calculating earnings per share (EPS)?
Learn why earnings per share (EPS) is often considered to be one of the most important variables in determining a stock’s ... Read Answer >>

Investing
Differences Between Forward P/E And Trailing P/E
The most common types of price to earnings ratios are forward P/E and trailing P/E. Find out how they differ and the advantages and drawbacks of each. 
Investing
Explaining Forward PricetoEarnings Ratio
The estimated P/E of a company is often used to compare current earnings to estimated future earnings. 
Investing
ConocoPhillips Second Quarter Earnings Preview
ConocoPhillips (NYSE:COP) will release its second quarter earnings on Wednesday, July 25, 2012. Analysts have become increasingly bearish on the company over the last month, with the consensus ... 
Investing
GE P/E Ratio: A Quick Analysis
A quick calculation and analysis of GE's trailing and forward P/E ratios. 
Investing
The 5 Types Of Earnings Per Share
A look at the five varieties of EPS and what each represents can help an investor determine whether a company is a good value, or not. 
Investing
Everything Investors Need To Know About Earnings
We go over the concepts behind the excitement over the most important figure in the stock market. 
Investing
General Electric Second Quarter Earnings Preview
General Electric (NYSE:GE) is expected to report increased earnings when it releases its second quarter results on Friday, July 20, 2012. The consensus estimate is anticipating a profit of 37 ... 
Investing
Beware False Signals From The P/E Ratio
The P/E ratio is a simple tool for evaluating a company, but no one ratio can tell the whole story. 
Investing
The Netflix P/E Ratio: What You Need To Know
We show you how to compute and analyze the P/E ratio for Netflix. 
Investing
American Airlines P/E Ratio: A Quick Analysis (AAL, DAL)
A quick analysis of American Airlines Group Inc., using the ubiquitous pricetoearnings ratio.

Forward Earnings
A company's forecasted, or estimated, earnings made by analysts ... 
Trailing EPS
The sum of a company's earnings per share for the previous four ... 
Trailing PriceToEarnings  Trailing P/E
The sum of a company's pricetoearnings, calculated by taking ... 
Rolling EPS
A measure of a company's earnings per share based on the previous ... 
Forward Price To Earnings  Forward P/E
A measure of the pricetoearnings ratio (P/E) using forecasted ... 
Earnings Per Share  EPS
The portion of a company's profit allocated to each outstanding ...