Expectations Guidance in Public Companies
An Examination of Management Forecast Disclosure in Germany and Switzerland
Nöldeke, Marisa
ISBN 978-3-03909-074-7
1. Auflage
erschienen in 2007
Sprache E
215 Seiten
broschiert
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About the book
Media coverage highlighting companies' inability to meet analysts' expectations – often disregarding respectable growth by the same companies – is nowadays a very common occurrence. In the face of increasing attention to analysts' expectations an increasing focus on so-called «earnings guidance» has arisen. The present work focuses on the issue of how listed companies deal with analysts' expectations.
Marisa Nöldeke presents a comprehensive review of academic disclosure and transparency literature in conjunction with the results of an anonymous questionnaire of transparency and earnings surprises in Germany and Switzerland. Further, through the investigation of short-term management forecasting behaviour as an instrument of earnings guidance, she draws the conclusion that managers have indeed come under increasing pressure to provide their own short-term forecasts. This is done in order to actively «walk down» analysts' forecasts.
Quotes
«This excellent and comprehensive research by Marisa Nöldeke gives a keen insight into the pressure felt by managers to provide the market with expected results. She further investigates instruments used to avoid negative surprises.»
Prof. Dr. Rudolf Volkart
«‹Short-termism› is the disease; earnings and tracking error are the carriers.»
Rappaport (2005), The economics of short-term performance obsession, in: Financial Analysts Journal, Vol. 61, S. 65-79.