Earnings guidance

What is earnings guidance?

Earnings guidance is a publicly traded corporation’s official indicator of its own near future loss or profit, declared as a sum of money per share. Usually given as a quarterly report, this method enables corporations to keep track and improve their performance for the next quarter.

Where have you heard about earnings guidance?

Earnings guidance is a steady way of helping financial analysts and the general stock market to value the achievements and downfalls of the corporation, helping to stop overvaluation. This information is known to have some effect on the way that investors hold, buy or sell a security.

What you need to know about earnings guidance.

In general, companies are never required to make the information in the guidance available to everyone, but it is seen as typical practice. Sometimes earnings guidance is known as a forward looking statement. These reports host an array of information such as market conditions, sales and company finances. They serve as a guide for possible future results and are watched closely by analysts and investors. However, for all the positive attributes related to these statements, there is a risk involved. Protective provisions were enforced to defend companies from possible lawsuits that could arise from not accomplishing forward looking expectations.