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What are earnings?

Earnings are a company’s after-tax net income and are considered its “bottom line” or profits.

Earnings are an important figure in a company’s financial statements. They represent a company’s financial performance and allow analysts to compare performance between similar organizations. Earnings are also a strong indicator of stock performance, as they can be reinvested back into the business or paid to shareholders as dividends. They're calculated on a quarterly and annual basis through statistics like earnings per share, or EPS, and P/E ratio.**