08 October 2013
Companies don't always turn a profit. Sometimes they lose money, in which case their earnings are negative. When earnings are negative, then EPS will be negative, too. A negative EPS tells you exactly how much money the company lost per share of outstanding stock, which is why you'll also see it called "net loss per share." If a company with 100 million shares loses $16 million, then its EPS is negative 16 cents. No, the company isn't going to send someone to shake you down for 16 cents per share. But you'll still "pay" for the loss in another way: A net loss decreases the value of the firm, which typically lowers the value of the stock.
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