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S&P Core Earnings

S&P Core Earnings

What is 'S&P Core Earnings'

The Standard and Poor's revised version of the measurement of core earnings, which excludes any gains related to pension activities, net revenues from the sale of assets, impairment of goodwill charges, prior-year charge and provision reversals, and settlements related to litigation or insurance claims. Expenses related to employee stock option grants, pensions, restructuring of present operations or any merger and acquisition costs, R&D purchases, write-downs of depreciable or amortizable operating assets, and unrealized gains/losses from hedging activities are all included in the core earnings.

Explaining 'S&P Core Earnings'

This is a new standard created by S&P with the assistance from the financial and investment community. These core earnings provide for transparency and consistency, as well as a more stringent definition of a company's core earnings, clearly setting out exactly what can and cannot be considered earnings and expenses.


Further Reading


Top Five Executives' Share of Core Earnings
search.proquest.com [PDF]
… Second, in recent years, the top five executives in a typical S&P 500 company have been receiving less … Thirdly, the top five executives' share of core earnings is related to firm specific characteristics, such as firm size and … Baum and Ford are Professors of Economics while Zhao …

The differential value relevance of S&P's core earnings versus GAAP earnings: the role of stock option expenseThe differential value relevance of S&P's core earnings versus GAAP earnings: the role of stock option expense
onlinelibrary.wiley.com [PDF]
… Second, in recent years, the top five executives in a typical S&P 500 company have been receiving less … Thirdly, the top five executives' share of core earnings is related to firm specific characteristics, such as firm size and … Baum and Ford are Professors of Economics while Zhao …

Earnings management using classification shifting: An examination of core earnings and special itemsEarnings management using classification shifting: An examination of core earnings and special items
meridian.allenpress.com [PDF]
… Second, in recent years, the top five executives in a typical S&P 500 company have been receiving less … Thirdly, the top five executives' share of core earnings is related to firm specific characteristics, such as firm size and … Baum and Ford are Professors of Economics while Zhao …

Reporting financial performanceReporting financial performance
meridian.allenpress.com [PDF]
… Second, in recent years, the top five executives in a typical S&P 500 company have been receiving less … Thirdly, the top five executives' share of core earnings is related to firm specific characteristics, such as firm size and … Baum and Ford are Professors of Economics while Zhao …

Comparative Value-relevance of GAAP, IBES, S&P Core, Cash Earnings and Cash FlowsComparative Value-relevance of GAAP, IBES, S&P Core, Cash Earnings and Cash Flows
papers.ssrn.com [PDF]
… Second, in recent years, the top five executives in a typical S&P 500 company have been receiving less … Thirdly, the top five executives' share of core earnings is related to firm specific characteristics, such as firm size and … Baum and Ford are Professors of Economics while Zhao …

In search of a pro forma earnings standardIn search of a pro forma earnings standard
search.proquest.com [PDF]
… Second, in recent years, the top five executives in a typical S&P 500 company have been receiving less … Thirdly, the top five executives' share of core earnings is related to firm specific characteristics, such as firm size and … Baum and Ford are Professors of Economics while Zhao …

Disclosure strategies among S&P 500 firms: Evidence on the disclosure of non-GAAP financial measures and financial statements in earnings press releasesDisclosure strategies among S&P 500 firms: Evidence on the disclosure of non-GAAP financial measures and financial statements in earnings press releases
www.sciencedirect.com [PDF]
… Second, in recent years, the top five executives in a typical S&P 500 company have been receiving less … Thirdly, the top five executives' share of core earnings is related to firm specific characteristics, such as firm size and … Baum and Ford are Professors of Economics while Zhao …

The value relevance of S&P's core earnings vs. GAAP earningsThe value relevance of S&P's core earnings vs. GAAP earnings
go.gale.com [PDF]
… Second, in recent years, the top five executives in a typical S&P 500 company have been receiving less … Thirdly, the top five executives' share of core earnings is related to firm specific characteristics, such as firm size and … Baum and Ford are Professors of Economics while Zhao …



Q&A About S&P Core Earnings


What does S&P Core Earnings measure?

The Standard and Poor's revised version of the measurement of core earnings, which excludes any gains related to pension activities, net revenues from the sale of assets, impairment of goodwill charges, prior-year charge and provision reversals, and settlements related to litigation or insurance claims. Expenses related to employee stock option grants, pensions restructuring of present operations or any merger and acquisition costs are all included in the core earnings.

What can be considered as part of core earnings?

Gains related to pension activities are not included in core earnings. Net revenues from the sale of assets are also excluded. Impairment charges on goodwill due to changes in market conditions are not included either. Prior year charge and provision reversals are also excluded from this calculation as well as settlements relating to litigation or insurance claims. Expenses related to employee stock option grants, pensions restructuring of present operations or any merger and acquisition costs are all included in the core earnings.

How do you calculate S&P Core Earnings?

You first take operating income less non-operating expenses like interest expense (net), depreciation expense (excluding amortization), amortization expense (excluding depreciation) non-cash compensation expenses such as stock options granted for employees excluding cash payments made under these plans; then you add back items that were previously deducted such as one time gains/losses on asset sales; write down losses on depreciable assets; unrealized gains/losses on hedging activities; R&D purchases; write downs for depreciable or amortizable operating assets; other extraordinary items that impact current period results but will not recur again during future periods like legal settlement costs incurred during a particular quarter etc.; finally you divide it by