|  | | 2005 News and Press Releases | | |
HEADLINE NEWS:
Chamber Chief Says It's Time To Stop Quarterly Earnings Reports
Staff Writer – Washington Post
Securities Mosaic. December 1, 2005
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EXCERPT: U.S. Chamber of Commerce president and chief executive Thomas Donohue on Wednesday called on all publicly traded companies to stop offering quarterly earnings guidance, saying such predictions create a damaging focus on ``meaningless short-term performance'' and undermine a company's ability to manage for the long term. ``Earnings projections are a fool's game for management,'' Donohue said at a conference organized by the Wall Street Analyst forum. ``Companies want to project numbers that will please Wall Street, their shareholders and all of the bloggers and talking heads on cable TV. ``All company executives, especially those of large public companies, should follow the lead of others who have stopped issuing earnings guidance. Short of that, companies should never offer a single figure instead of a wide range.'' Some academics and prominent business executives, including Berkshire Hathaway Inc. chief executive Warren Buffett, have said Wall Street's relentless focus on whether companies hit or miss quarterly earnings targets encourages balance-sheet manipulation and discourages long-range planning. Buffett is a board member and major shareholder of The Washington Post Co., which does not offer quarterly guidance. Donohue, whose organization claims to represent 3 million domestic and foreign corporations, said he hoped to ``start a stampede'' of companies refusing to give quarterly guidance. He said many executives despise giving such guidance but are afraid to stop because they think they would be punished by Wall Street analysts and shareholders. Donohue said he hoped his comments would embolden more executives to take a stand. ``Warren Buffett and others have very publicly voiced concern about this focus on quarterly earnings and, in particular, guidance about future'' earnings per share, he said. |
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