Earnings Per Share
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EPS is calculated as net income minus preferred dividends, divided by the weighted average number of common shares outstanding during the period. It measures how much profit is attributable to each individual common share.

Basic EPS uses only actual shares currently outstanding, while diluted EPS also accounts for shares that could be created from convertible securities, stock options, and warrants. Diluted EPS is generally lower and is considered a more conservative measure of per-share profitability.

Preferred shareholders have a priority claim on earnings before common shareholders, so their dividends must be deducted from net income first — EPS is meant to reflect only the profit available to common stockholders.

No, if net income is positive and preferred dividends don't exceed it, EPS will be positive; EPS turns negative only when net income itself is negative (a net loss) after accounting for preferred dividends, since a share count can't be negative.

Yes, buybacks reduce the number of shares outstanding, so the same net income gets divided among fewer shares, mechanically increasing EPS even without any actual improvement in the underlying business performance.