What does Earnings per share mean? I just bought....?

Question

I just bought a stock GYMB and they are expected to have their quarterly report today. I've read from some sources (thestreet.com standards and others, etc) that they recommend this a buy to a strong buy.

I think the company has a nice niche in the market but I dont know anything about the financial reports, what they mean and how to read them.

I copied this below:

GYMB reported 1st quarter 2009 earnings of $0.86 per share on May 21, 2008.

The next earnings announcement from GYMB is expected the week of August 20, 2008.

My question is first of all what does earnings per share mean? and how do I know if $0.86 is good or bad?

And how can they report on 2009 earnings???

Answer 1

Make sure that you are comparing similar stocks within the same industry. You also need to look at the

EPS history of the company. The EPS should increase with a few exceptions such as new acquisitions.

Answer 2

First of all, 2009 refers to the fiscal year not calendar year, so don't worry about it. Earnings per share is just what it sounds like, net profit that the company earned divided by the number of shares outstanding (well, to be exact, the weighted-average number of shares used, but that's irrelevant for the purpose of this question). The absolute number doesn't mean much, you need to consider it relative to something. What that something is is a big topic, which is beyond a simple 1-paragraph answer.