What are 'Headline Earnings'

Headline earnings are a basis for measuring earnings per share implemented by the former U.K. Institute of Investment Management and Research (IIMR). This method accounts for all the profits and losses from operational, trading and interest activities, which have been discontinued or acquired at any point during the year. Excluded from this figure are profits or losses associated with the sale or termination of discontinued operations, fixed assets or related businesses, or from any permanent devaluation or write-off of their values.

BREAKING DOWN 'Headline Earnings'

Headline earnings provide a stringent measurement tool to isolate core operational profitability. By excluding asset sales, termination of discontinued operations, restructuring charges and write-downs, the headline earnings number shows the profitability of a company's core business.

Some companies report headline earnings per share in addition to required EPS figures. However, headline earnings are non-GAAP and must be reconciled with net income if presented in shareholder reports in accordance with SEC regulations.

IIMR, the organization that introduced the concept of headline earnings as a way to better analyze a company's P&L statement, eventually evolved into the present-day CFA Society of the U.K.

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  3. Discontinued Operations

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  4. Headline Inflation

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  5. Core Earnings

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  6. Earning Potential

    Earning potential refers to the possible earnings per share gains ...
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