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Weighing The Pros And Cons Of Earnings Guidance: A McKinsey Survey

A large majority of the executives whose companies routinely issue earnings guidance say that they have no plans to alter their approach, but they show little agreement on the costs and benefits of the practice, according to the latest McKinsey Quarterly survey.

The following are highlights from an article in "The McKinsey Quarterly," a publication of McKinsey & Co., an InstitutionalInvestor.com content provider:

Take Away:

A large majority of the executives whose companies routinely issue earnings guidance say that they have no plans to alter their approach, but they show little agreement on the costs and benefits of the practice, according to the latest McKinsey Quarterly survey.  While some major companies have discontinued issuing guidance, surveyed executives also disagree about the potential consequences of reducing the frequency of guidance or eliminating it altogether. Most of the respondents say that hedge-fund trading has no effect on their companies' longterm share prices.

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