article: Stop quarterly earnings reporting (bankruptcy, accounting, buy, sell)

[gardener34]

A very interesting article about how the quarterly earnings reporting by companies should be stopped:

Business Articles: The Earnings Game: Everyone Plays, Nobody Wins (HBR OnPoint Enhanced Edition) - Harvard Business Review (http://www.hbsp.harvard.edu/hbsp/hbo/articles/article.jsp?articleID=9489 - broken link)

[chet everett]

The ideas in that article have been around for a looooooong time. No one company is going to dare and stick their neck out to be the first to do away with quarterly estimates. There has to be some huge incentive for the firm AND those that profit from the "reading the entrails" of quarterly reports. I suspect if something like this were done "by law" in a smaller economy (like Australia or France or similar) and the RESULTS were positive it MIGHT catch on the in the US, but that could take years...

Good in theory, hard to implement!

[IonRedline08]

Yeah, they have been talking about that for a while.

Would be very interesting to see how that would work for the the first companies to try it.

The one issue I would see, is that it would be harder to identify companies that are in trouble until it is too late

[Dd714]

Quarterly earnings reports isn't the issue, it's the interpretation of KPI's that stockholders and investors rely on.

Public companies are required to submit quarterly earnings, and accounting is heavily regulated and audited. If you know what you are looking at you can very accurately tell if a company is in trouble or not. Revenue, profits, etc...doesn't make a difference. But Wall Street analysts are lazy, they expect corporations to tell them what the bottom line numbers will be and, if they don't make those numbers, they think a company is a bad investment and start dumping the stocks.

[thebigr]

GE and Intel already said they will not give quarterly earnings. I would like to see more companies do the same.

[HappyTexan]

So you'd rather wait for an annual report or bankruptcy filing to determine if a company is a good buy or not or worse, whether you should sell the stock ?

No thanks..letting them off the hook to report 4 times per year is just asking for trouble.
Don't we have enough of that already ?

[Dd714]

Originally Posted by thebigr

GE and Intel already said they will not give quarterly earnings. I would like to see more companies do the same.

I assure you, as a public company trading on wallstreet, they will issue quarterly earnings reports.
What GE and Intel will no longer provide is quarterly forecasts and guidance.

[killer2021]

No quarterly earnings?

Yea, like that is going to make more people invest in the stock market.

[HappyTexan]

Well I guess it might be good for them..that gives them 12 months to wheel and deal and play with numbers to make their company look good rather than have to do it every 3 months.