View source for Finance:Earnings guidance

{{Short description|A publicly traded corporation's official prediction}}
In financial reporting, '''earnings guidance''' or simply '''guidance''' is a publicly traded [[Company:Corporation|corporation]]'s official prediction of its own near-future [[Finance:Profit (accounting)|profit]] or loss, stated as an amount of money per [[Finance:Share|share]]; see [[Earnings call]].  
Earnings guidance is usually a [[Finance:Financial forecast|financial forecast]] presented as a quarterly report of the corporation's performance in the next quarter.  
Guidance is an aid to [[Finance:Financial analyst|financial analyst]]s and the [[Finance:Stock market|stock market]] in [[Finance:Valuation#Business valuation|valuing the corporation]], and helps prevent overvaluation.

According to [[Investopedia]], '''Guidance''' refers to Information that a company provides as an indication or estimate of its future earnings.  Guidance reports estimating a company's future earnings have some influence over analyst stock ratings and investor decisions to buy, hold, or sell the security.<ref>{{Cite news|url=http://www.investopedia.com/terms/g/guidance.asp|title=Guidance|last=Staff|first=Investopedia|date=2003-11-23|work=Investopedia|access-date=2018-11-29|language=en-US}}</ref>

In the United States, a quarterly revenue forecast, or quarterly guidance, by [[Finance:Public company|publicly traded companies]] had become by the 2000s both a common practice (75% of American firms in 2003) and a major influence on the firm's share price.<ref name=":0">{{Cite news|url=https://www.ozy.com/fast-forward/is-the-end-of-quarterly-forecasting-in-sight/93148|title=Is the end of quarterly forecasting in sight?|last=Adams|first=Kimberly|date=2 June 2019|work=OZY|access-date=29 June 2019}}</ref>  
By the 2010s, the quarterly guidance practice had fallen out of favor among many companies (27% of firms continued the practice in 2017) as it was seen as emphasizing a focus on short-term performance.<ref name=":0" />  
By contrast, public Eurozone companies rarely (1%) issued quarterly guidance in the 2010s.<ref name=":0" /> 

==References==
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[[Category:Financial markets]]
[[Category:Corporate finance]]

{{Sourceattribution|Earnings guidance}}