**Stock buybacks increase earnings per share (EPS).** Here's why:
* **Reduced Share Count:** When a company buys back its own shares, it reduces the total number of outstanding shares in the market.
* **Earnings Distribution:** With fewer shares outstanding, the same amount of earnings is distributed among a smaller number of shares.
* **EPS Calculation:** Since EPS is calculated by dividing net income by the number of outstanding shares, a lower share count leads to a higher EPS.
**In essence, stock buybacks increase the proportion of earnings each remaining share represents, making them more valuable.**
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