NIRI survey reveals fewer companies providing earnings guidance

VIENNA, VA: The number of companies that provide earnings guidance to investors and analysts is on the decline, according to a recent survey from the National Investor Relations Institute.

VIENNA, VA: The number of companies that provide earnings guidance to investors and analysts is on the decline, according to a recent survey from the National Investor Relations Institute.

The survey of more than 500 NIRI members found the percentage of companies providing such guidance fell to 71% from 77% in December of 2003.

The popularity of annualized guidance, as opposed to quarterly, is on the rise. The percentage of companies that only provide annualized estimates nearly doubled, to 28%. And the companies providing only quarterly guidance fell to 28%, from 53%.

While earnings estimates have long been a mainstay of Wall Street, some companies believe that they discourage long-term thinking by analysts, and create an environment ripe for accounting gimmickry. But asked if ending earnings guidance would encourage analysts to take a more long-term view of their company, fully half of the respondents to the NIRI survey said it would not.

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