When expenses decreases and company is able to cut the cost then also the earnings of the company increases with increase in sales. Earnings per share decreases when company issues new shares which affect the earnings per share negatively for example in case of rights and bonus.

What affects earnings per share?

Based on the formula of earnings per share, the only determining factors for an increasing EPS can either be an increase in net income or a decrease in the total number of outstanding shares. A higher net income figure will depend on increasing revenues or lower costs that are associated with that revenue.

What does a dropping EPS mean?

Retained Earnings. Earnings per share, or EPS, tells you how well a company is generating profit for its shareholders. When earnings per share is negative, it means the company is losing money.