Tuesday, June 06, 2006

U.S. Corporations Becoming Too Relaxed in Their Forecasting

The disconnect between analyst expectations and corporate earnings performance was especially striking in the high tech, materials and energy, industrial and financial sectors in 2005. High tech had the largest percentage of companies exceeding market EPS estimates with the materials and energy sectors a close second. At the other end of the spectrum, the industrial and financial sectors had the largest percentage of companies that underperformed compared to market EPS estimates.

Since the passage of the federal Sarbanes-Oxley Act on financial disclosure in 2002, the timeframe in which companies must report their quarterly and annual earnings to the SEC has been reduced significantly. This need to report more quickly to the SEC -- while maintaining the necessary level of transparency and accuracy -- has put a tremendous amount of pressure on companies.

"Misses -- be they positive or negative -- impact the integrity of financial reporting," continued Neeley. "It is possible for Wall Street to report more 'hits' and fewer 'misses' during earnings season with a more deliberate approach to data gathering and reporting. And a streamlined reporting system can help significantly."

U.S. Corporations Becoming Too Relaxed in Their Forecasting

Send to a friend:

0 Comments:

Post a Comment

<< Home

Previous articles

Dr. Peter Morici: Will the NYSE-Euronext merger sm...

Corporate America's next scandal could be backdati...

High hurdles for Hank

SOX It to Them

Going Private

Huge challenges await new treasury chief

Is This What Is Meant By 'Investor Protection'?

Susan Antilla: Will Courts Help Fraudsters Beat Sa...

Companies hire 'inside cops' to protect them from ...

It's Time to Review Sarbanes-Oxley