Some Companies Stop Telling What They Expect to Earn


2006-4-20

I'm Steve Ember with the VOA Special English Economics Report.

Many companies provide earnings guidance. They tell their shareholders how much they expect to earn in the future. Often companies report expected earnings for each three-month period.

Earnings are usually measured in terms of earnings-per-share. That is, the amount of earnings divided by the number of shares in a company. Companies usually have millions, even thousands of millions, of shares. So even earnings-per-share of one cent can add up to a lot of money.

But not everyone supports the idea of earnings guidance. First of all, some say the pressure to report earnings growth can lead to dishonest reporting. One example they point to is the case of the failed energy-tradin