I regularly see financial news articles that say "Company X's earnings beat analysts' forecasts by 15%". When companies release their quarterly results, these results are called "earnings releases". There seems to be a fixation on earnings and earnings per share (EPS). Why is that? What makes the EPS more interesting than other metrics such as revenue, free cash flow, inventory levels, cash levels, changes in expenses, etc.? I see "XYZ corp. profit exceeds analyst forecasts" far more often than "XYZ corp. free cash flow exceeds analyst forecasts". Why the singular focus on earnings?
All else being equal, net income produced by a company, attributable to its shareholders, is a fundamental driver of the value of a share. Many other things are relevant and should be considered (Is net income high because, like TSLA in 2020, you had a $1B+ speculative gain on trading BTC?), but net income is a simple comparison point to start analysis from.
Now, how does that net income relate to you personally, as an individual investor?
From an investor's perspective, the value of that net income is relative to your ownership. Earnings of $1B, when you own 1% [ie: $10M attributable net income, is in some ways the same as having 10% ownership of $100M]. So it's really NI-per share, that indicates what your share is actually worth, because different companies naturally have different numbers of shares outstanding. In theory, it might make it easier to compare an investment into Apple vs Microsoft - simply put, if Apple earns $100 per share every year, and Microsoft earns $50 per share every year, you might say, simplistically, that if their future outlook is the same in the eyes of the public, an Apple share should cost 2x a Microsoft share.
In short - EPS is touted quick shorthand that allows for rudimentary comparison of different companies. Be careful that you don't put too much weight into simplistic analysis, but in terms of what you could quickly make into an attention-grabbing headline, convention makes this an frequent choice.
What are earnings?
This question boils down to what are earnings? Earnings = net income, which indicates the profitability of a company. Growing earnings means growing profitability.
Think of a company not listed on the stock exchange: if it is owned and operated by someone, the more net income it generates, the more value it has generated and turned into profit. This means the more that owner has profited - and can use their riches in the economy.
To put it simply, earnings are profit that an owner owns and can use.
Now think of the stock market. What better measure to indicate that a company is profitable and can prove growth, than "earnings per share". It circles down to the one-man owner. An individual investor wants to know that his investment is growing and is profitable.
"Earnings per share" is an investor-centric confidence booster of the value a company can generate.
That's why it is the gold standard.
It is merely a convention that emerged out of the relationship between equity analysts (on Wall Street) and investor relations departments (at public companies).
Equity analysts started to make forecasts for their customers; and EPS was a convenient shorthand for these forecasts. Some public companies obliged the analysts by providing or guiding the earnings forecasts. These forecasts tend to be conservative, so that the companies can regularly 'beat' the EPS forecast by a penny or two.