earnings guidance

Earnings guidance is the common practice of publicly held corporations issuing quarterly disclosures to both securities analysts and the public about the level of earnings that the company expects to report in the near future. Some say that doing away with quarterly earnings guidance will help companies focus on long-term results, a practice that should ultimately increase shareholder value. Another argument against issuing earnings guidance is that it often encourages undesirable executive behavior (e.g., artificially boosting earnings), in an effort to meet guidance targets, which sometimes leads to claims against corporate directors and officers.