Although a substantial majority of corporate members of the Vienna, Va.-based National Investor Relations Institute (NIRI) still provide guidance on expected earnings, the percentage doing so is now 71%, down six percentage points from 77% in December 2003.
However, for those companies continuing to give guidance, a range of earnings-per-share estimates is the most common kind of information they give, with four of five companies NIRI recently surveyed doing that. Sixty percent offer revenue estimates. Some 10% provide an earnings model, and 5% estimate a specific earnings-per-share number. Thirty percent use a variety of other means to advise securities analysts of their expected earnings. (The percentages add to more than 100%, reflecting that individual companies may provide earnings guidance in several ways.)
In a clear trend toward greater disclosure, 93% of the companies surveyed now update their earnings guidance if there's a "material" change in their financials, compared with 80% of companies in 2003. Putting out a news release is by far the most common means they use to provide updated guidance; 83% of companies surveyed do it. Forty percent set up a fully accessible conference call, and 48% put the information in an 8-K filing with the U.S. Securities & Exchange Commission.
While 64% of the companies surveyed say they're not considering ending earnings guidance, down significantly from 78% in 2003, nearly half (47%) claim if they were to stop providing guidance, it would have no impact on analyst coverage. Thirty-two percent say it would have some impact, and 2% believe it would cause them to lose analyst coverage altogether.
The survey included 527 NIRI member companies whose market capitalization ranges from under $100 million to more than $10 billion.