Spire Inc.'s (NYSE:SR) robust recent earnings didn't do much to move the stock. However the statutory profit number doesn't tell the whole story, and we have found some factors which might be of concern to shareholders.

See our latest analysis for Spire

In order to understand the potential for per share returns, it is essential to consider how much a company is diluting shareholders. Spire expanded the number of shares on issue by 6.1% over the last year. That means its earnings are split among a greater number of shares. To talk about net income, without noticing earnings per share, is to be distracted by the big numbers while ignoring the smaller numbers that talk to per share value. You can see a chart of Spire's EPS by clicking here.

How Is Dilution Impacting Spire's Earnings Per Share (EPS)?

Spire has improved its profit over the last three years, with an annualized gain of 3.9% in that time. But on the other hand, earnings per share actually fell by 6.1% per year. And in the last year the company managed to bump profit up by 18%. But in comparison, EPS only increased by 9.0% over the same period. So you can see that the dilution has had a bit of an impact on shareholders.

In the long term, earnings per share growth should beget share price growth. So Spire shareholders will want to see that EPS figure continue to increase. However, if its profit increases while its earnings per share stay flat (or even fall) then shareholders might not see much benefit. For that reason, you could say that EPS is more important that net income in the long run, assuming the goal is to assess whether a company's share price might grow.

That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

Our Take On Spire's Profit Performance

Spire shareholders should keep in mind how many new shares it is issuing, because, dilution clearly has the power to severely impact shareholder returns. Because of this, we think that it may be that Spire's statutory profits are better than its underlying earnings power. The good news is that, its earnings per share increased by 9.0% in the last year. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. If you want to do dive deeper into Spire, you'd also look into what risks it is currently facing. Case in point: We've spotted 2 warning signs for Spire you should be mindful of and 1 of these is concerning.

Today we've zoomed in on a single data point to better understand the nature of Spire's profit. But there are plenty of other ways to inform your opinion of a company. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.