The percentage year-on-year change in quarterly EPS. Because of normal seasonal fluctuations in a company’s earnings throughout a fiscal year, it is usually best to compare quarterly EPS figures with the same quarter one year ago, rather than with the quarter that immediately precedes it. The calculation of quarterly year-on-year change is the most recent quarter’s EPS minus the year-ago quarter’s EPS, divided by the year-ago quarter’s EPS; the resulting figure is then multiplied by 100.
Benefit
If this figure is positive, the company’s earnings are growing; if it’s negative, earnings are generally declining. However, it’s best to look at the EPS % Change for all four of the most recent quarters. Sometimes a one-time charge can depress earnings for a single quarter, even though the company’s earnings are generally rising; in other cases, earnings may have only started slipping in the most recent quarter.
Origin
Calculated in-house using current year EPS and EPS for the same quarter one year ago. This information is updated weekly.
For the Pros
Use the following formula to focus on changes from one quarter to the next, instead of looking at changes from the year-ago number:
((EPS Quarter 1 – EPS Quarter 2) / EPS Quarter 2) x 100