Dollars and Jens
Monday, November 03, 2003
"Study" Says Companies Shouldn't Give Out Earnings Guidance
I provide this story more as general reading material than as something I have a comment on, but I would like to point out that the term "poll" would be more appropriate than "study". The word "study" suggests that someone found a causal relationship between giving earnings guidance and low shareholder returns, or low returns on equity, or osteoporosis, or whatever. This is just a poll of AIMR members, many of whom believe that specific earnings numbers lead to earnings manipulation.

I figure they're probably right to some extent, but I don't see this as a huge problem. My suggestion to corporate management is this: tell us what you know, and don't tell us what you don't know.

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