Earnings

Earnings mean the profit a company makes after costs and expenses. In simple terms, earnings show how much money a company actually keeps after running its business. Earnings are important because investors use them to judge whether a company is healthy, growing, or becoming less profitable. When a company reports strong earnings, its stock price may rise. When earnings disappoint investors, its stock price may fall. For example, if a company has $1 billion in revenue and $800 million in costs and expenses, its earnings are $200 million. Earnings are not the same as revenue. Revenue is the money a company brings in from sales, while earnings are what remains after costs and expenses are subtracted.