Is the earnings per share (EPS) amount given to the investor by being added onto the price?

Is this following example right? A company had $2.00 in earnings per share for Q1, but when it reported the earnings investors sold a lot of it, and the price would have dropped $3.00 but since there was a $2.00 earnings per share the share only dropped by $1.00. Or am I completely missing something here?

There is no direct relationship between the EPS and what a companies stock price does.

The EPS is how much money a company earns in a given period of time, usually a quarter or year. It has no direct relation to the stock price, although companies which have growing earnings tend to see their stock price go up, and those that have earnings slowing (or have negative earnings) may see their price decline. However, it isn't always the case. Sometimes a company will report great earnings per share, but give a negative outlook in their conference call, and the stock price will drop significantly.

One thing to look at is the price/earnings growth, otherwise known as the PEG. It tells you how "expensive" a stock is in relationship to its earnings growth. A stock with a PEG of less than 1 generally means that the stock is fairly cheaply valued, while a value above 2 is a richly valued company (these values per Jim Cramer).

On a separate note, it sound from your question that you might be thinking of dividends. In general, a company's stock will fall by the amount of a dividend on the ex-div date (i.e. the date that the ownership is determined for the distribution). However, this isn't a rule, and often the stock will open down the amount of the dividend, but make up a portion of that during the trading day.

EPS and the Price Per Shares that investors willing to pay is no doubt related but indirectly.

take GE for example, its current EPS is about $2.17 and the price of the stock is about $34.

if GE makes let say $10 per share this year... and they make $10 per share next year... the PPS would probably go down, because there is no growth. However, they are still making money and they are still dividending the loyal investors... so the PPS might not hurt as much.

PPS is usually the multiples of a quality company's real asset coupled with growth. For example, if a company total asset is 1 million dollar, it has 1 million shares, people should pay $1 per share for it but because it is a high potential for growth in the future, investors willing to pay a high premium for it.

I hope this won't confuse you even more, it is actually more complicated than I described. A lot of details go into calculating/ projecting what the future worth of a company.