Corporate Finance Alert: Earnings Guidance

Public companies are not required by any law, rule or regulation of the SEC or any stock exchange to issue earnings guidance. However, investors and analysts often expect to receive earnings guidance, especially for companies in certain industries. Should a company give earnings guidance? If so, how often should it do so? When, if ever, should it update previously issued guidance outside its normal financial reporting schedule? What kind of guidance should companies give?

These questions raise difficult issues for public companies, and the current challenging economic environment has made these issues even more difficult to address.

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