Buffett And Dimon: No More Quarterly Profit Forecasts

Despite the short-term hit to results from the tax bill, chief executive Jamie Dimon hailed the measure as a boon for the USA economy."US companies will be more competitive globally, which will ultimately benefit all Americans", Dimon said in a news release.

In their op-ed piece, Buffett and Dimon argue that "effective long-term strategy drives economic growth and job creation" and that quarterly EPS guidance "often leads to an unhealthy focus on short-term profits at the expense of long-term strategy, growth and sustainability".

"It can put a company in a position where management from the CEO down feels obligated to deliver earnings, and therefore may do things that they wouldn't otherwise have done", Dimon said.

The two men noted that companies often hesitate to spend on technology, hiring, and research and development in order to meet quarterly earnings guidance that can be impacted by seasonal factors beyond their control, such as political events and even weather. Around that time, big companies like Coca Cola, UPS and AT&T said they would no longer give quarterly guidance. That's not too surprising given the Dimon is now the chair of the Business Roundtable.

FILE PHOTO: Jamie Dimon, CEO of JPMorgan Chase, takes part in a panel discussion about investing in Detroit during a panel discussion at the Kennedy School of Government at Harvard University in Cambridge, Massachusetts, U.S., April 11, 2018.

Quarterly earnings guidance works like this.

On Thursday morning, the Business Roundtable which includes CEOs of USA companies with more than 16 million employees and more than $7 trillion in annual revenues, weighed in supporting the proposal.

Those in favor of guidance say it improves communications with Wall Street, reduces share price volatility and boosts a stock's value.

Buffett and Dimon said they were not opposed to the practice of quarterly and annual reporting that ensures transparency. CEO Jamie Dimon appealed for radical changes to the way public companies disclose financial information. Public companies owe it to all of them to get this right, they said.

(Copyright © 2015. All Rights Reserved.)
 
Recommended

Arsenal Agree £16m Deal for Dortmund Defender Sokratis Papastathopoulos
So we need a new start. 'I think it's hard to see a club like Arsenal not playing in the Champions League if you see the players, club and stadium.

Spain's new PM names government, women take top posts in cabinet
On a day-to-day basis, Meritxell Batet, another Catalan, has been put in charge of relations with Spain's regions. He is running a minority government - since his own party holds only 84 seats in the 350-seat chamber.

Xi Jinping Awards China’s First Friendship Medal to Vladimir Putin
The two heads of state reviewed a military honour guard and greeted flag-waving children during the welcoming ceremony before retreating into the vast building.

The most stylish royal looks from 2018's Trooping the Colour ceremony
Just seven weeks ago Kate gave birth to her third child, Prince Louis , at St Mary's Hospital in Paddington, London. This year's event took an unexpected turn when 79-year-old Field Marshall Lord Guthrie was thrown from his mount.

Twin Mirror Revealed by Life Is Strange Developer
With this being the case, we will simply have to wait and see what else Dontnod Entertainment has in store for fans with Twin Mirror .

New Zealand women hit ODI record 490 runs vs Ireland
The Irish wickets were spread around by the White Ferns, though Leigh Kasperek cleaned up the tail to claim 4-17 off 2.3 overs. Amelia Kerr contributed in piling on the misery by scoring 81 off 71 balls with nine fours and three sixes.

G7 leaders meet amid fear of a global trade war
Trump also singled out tariffs on US dairy products in yet another scathing tweet directed at Canada just before the G-7. Hours before he boarded Air Force One to fly to Quebec for the G7 meeting, U.S.

Five reasons why the SCO summit is important
The China-led grouping includes India, Russia, Pakistan and several Central Asian countries, as well as Iran as an observer state. President Donald Trump withdrew from the Iran nuclear deal. " Met this year's SCO host, President Xi Jinping this evening".

Yahoo Messenger to shut down in July after 20 years
It thrived as one of the top instant messaging services of the 90s with hundreds of millions of people using the service. Yahoo recommends that users remove them from their devices as they can't be used anymore after the date.

Tiger Woods Will Live Aboard His $20 Million Yacht During US Open
It's not the first time he's done this-he also pulled the Privacy into a marina for the U.S. The US Open is at Shinnecock Hills on Long Island, New York, starting on the 14 June.

Manchester United's new signing Fred suffers injury scare
Brazil play their final World Cup warm-up game on Sunday against Austria in Vienna with Fred expected to sit out as a precaution.

DOJ Won't Defend Obamacare in Lawsuit Brought by 20 States
The mandate in Obamacare was meant to ensure a viable health insurance market by forcing younger and healthier Americans to buy coverage.

LeBron can’t save himself, so he’ll leave Cleveland after losing NBA Finals
Short gave that crowd plenty of reasons to cheer over his nine seasons with the team , which included the prime of his career. Months of weight will lifted off him once the Warriors , who haven't lost four straight games since 2013, are crowned again.

Watch the ‘First Man’ trailer, the Neil Armstrong biopic starring Ryan Gosling
Take a look at the first trailer for First Man , courtesy of Universal Pictures , as we get closer and closer to the October 12 release.

Syphilis diagnoses highest for almost 70 years
The body recommended that local authorities enable young women to be tested for chlamydia while accessing contraceptive services. Highest incidence is seen among adults aged between 25 and 34 years and they were one third of all the cases.


More News

News
More News