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rloose  
#1 Posted : Tuesday, March 20, 2018 10:51:24 PM(UTC)
rloose

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For both CEO (2016) and JNJ (2017), the EPS values that are imported into Toolkit 6 are very low and do not agree with data from other sites. Can you explain the reason for the difference?

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Pawche  
#2 Posted : Tuesday, March 27, 2018 3:59:21 AM(UTC)
Pawche

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The data feed from ToolKit for JNJ shows 2017 EPS of .47. I checked with Value Line which gives a 2017 EPS of 6.20. When you look at the footnotes for Value Line it indicates the EPS figure does not include a one time item. This was a charge of 5.73 per share. Subtracting 5.73 from 6.20 gives .47.
When I searched Value Line for CEO I got no results. I suspect the reason for the difference is the same, a one time charge that some sources include in EPS and other sources do not. The ToolKit data feed uses data from Morningstar. It appears Morningstar includes one time charges in their EPS calculation while Value Line does not. Value Line footnotes one time charges.
When to consider including one time charges and when to ignore has been a hot topic off and on during my investing life. A rough rule of thumb is to include them if a company uses them frequently. They are not really one time events for these companies. If such items really occur infrequently then ignoring them can give a better picture of the ongoing business of the company.
This year there may be a lot of one time events related to the new tax law. Many companies had tax credits on their books as assets. With the lowering of corporate tax rates these credits are now worth less. Companies will need to write down these assets resulting in one time charges against earnings.

Russell
thanks 1 user thanked Pawche for this useful post.
rloose on 5/18/2018(UTC)
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