Chapter 36

Earnings Quality

B. Lev

New York University, New York, NY, USA


A Case in Point

On 18 April 2006, Johnson & Johnson (J&J), a large pharmaceutical company, publicly disclosed that its first-quarter 2006 earnings per share (EPS) were $1.10, beating analysts’ consensus forecast of earnings by 3¢.1 Gilead Sciences, another pharma company, disclosed its first-quarter 2006 earnings of $0.275 EPS (split ...

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