warren buffett on earnings per share

Warren Buffett lessons

Misleading ‘record’ earnings

February 25, 2017

When companies say they achieve record earnings, be wary how they define “record” earnings. Warren Buffett said in a March 14, 1978, shareholder letter: “Most companies define ‘record’ earnings as a new high in earnings per share. Since businesses customarily add from year to year to their equity base, we find nothing particularly noteworthy in…