S&P said that the latest changes in equity analysis will increase transparency and improve investors' understanding of how companies are actually performing, a topic which has been of widespread concern since the collapse of energy giant Enron Corp.

"The increased use of so-called pro forma earnings and other measures to report corporate performance has generated controversy and confusion and has not served investor interests," said S&P President Leo O'Neill.

By taking into account the value of stock options in earnings results, S&P will "help build consensus and restore investor trust and confidence in the data used to make investment decisions," he added.

The company will focus on reporting on "core earnings," which by S&P's definition will include employee stock options grant expenses, restructuring charges from on-going operations, write-downs of depreciable operating assets, pension costs, pension costs, and purchased research and development.

S&P will, however, exclude goodwill charges, gains or losses from asset sales, pension gains, unrealized gains or losses from hedging activities, merger and acquisition related fees and litigation settlements.

"Our hope is to generate additional public discussion on earnings measures," said the credit agency's chief investment strategist David Blitzer.

"Once there are more generally accepted definitions, it will be much easier for analysts and investors to evaluate varying investment opinions and recommendations and form their own views of which companies are the most attractive," he added.