EARNINGS (LOSS) PER SHARE

9 Months Ended

Sep. 30, 2017

Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares outstanding during the period. For periods in which the Company reports net income, diluted net earnings per share is determined by using the weighted average number of common and dilutive common equivalent shares outstanding during the period unless the effect is antidilutive.

The calculations of shares used to compute basic and diluted earnings (loss) per share are as follows (in thousands):



	Three months ended		Nine months ended
	September 30, 2017	September 30, 2016	September 30, 2017	September 30, 2016
Weighted average shares outstanding—basic	49,753	49,402	49,472	49,436
Potential dilutive common shares	378	—	—	—
Weighted average shares outstanding—diluted	50,131	49,402	49,472	49,436

The Company has excluded 5.2 million weighted shares underlying options to purchase shares of the Company's common stock from the computation of diluted earnings per share for the three months ended September 30, 2017 because the options' exercise prices were greater than the average market price for the common stock and their effect would have been antidilutive. Options to purchase the Company's common stock and unvested shares of restricted and performance-based stock aggregating 7.4 million shares have not been included in the computation of diluted loss per share for the nine months ended September 30, 2017 because their effect would have been antidilutive. Options to purchase the Company's common stock, unvested shares of restricted and performance-based stock and shares in connection with future purchases under the Company's Amended and Restated 2000 Employee Stock Purchase Plan, as amended (the "ESPP"), totaling 8.2 million shares for the three and nine months ended September 30, 2016 have not been included in the computation of diluted loss per share because their effect would have been antidilutive.

SONUS NETWORKS INC 10-Q