Do public companies typically provide earnings guidance on either a quarterly or annual basis?

Corporate Governance

Austria Small Flag Austria

Usually earnings guidance are published quarterly.

Brazil Small Flag Brazil

Please refer to our comments on item 16.

France Small Flag France

Consistent with market practice generally, French listed companies typically provide earnings guidance on a quarterly and annual basis.

Germany Small Flag Germany

Most larger listed companies provide earnings guidance either in their half-year financial reports or their interim financial information during the year. Adjustments of the earnings guidance may be given during the year also on investor conferences or in interviews, unless their magnitude is price-sensitive, in which case the company has to publish an ad hoc notification (cf. question 16).

Greece Small Flag Greece

Greek public companies publish financial statements on a bi-annual and annual basis. Only credit institutions and other regulated entities are obliged to publish financial reports quarterly. Publication of earnings guidance (forecasts) by public companies is not market practice and should comply with specific rules (e.g. make reference to annual revenues, pre-tax earnings) in order not to be considered as market abuse. Any deviation from the published forecasted earnings should be published by the company as soon as possible after it realizes that its estimation is to be adjusted based on the actual earnings.

Hong Kong Small Flag Hong Kong

Companies listed on the Main Board and GEM Board are subject to financial disclosure requirements. A company listed on the Main Board is required to provide to its shareholders, its annual report including its annual accounts and the consolidated financial statements (if any) not less than 21 days before its AGM and in any event not more than four months after the end of the financial year to which they relate, and an interim report in respect of the first six months of each financial year not later than three months after the end of that period of six months (Chapter 13 of the Main Board Listing Rules). On the other hand, a company listed on the GEM Board is required to provide annual report not more than 3 months after the date upon which the financial period ended, a preliminary announcement of results for each of the first 6 month of each financial year not later than 45 days after the end of such period, and a quarterly report in respect of each of the first 3 and 9 month periods of each financial year not later than 45 days after the end of such period (Chapter 17 of the GEM Listing Rules).

According to rule 13.05(2) of the Main Board Listing Rules, rule 17.06(2) of the GEM Listing Rules and section 307B of the SFO, listed companies and their directors are required to disclose inside information as soon as reasonably practicable after the information has come to the listed companies’ knowledge, and to simultaneously make an announcement on the information (rule 13.09(2)(a) of the Main Board Listing Rules; rule 17.10(2)(a) of the GEM Listing Rules). Listed companies are therefore, required to publish profit alert or profit warning announcements as soon as the directors are aware of the financial performance prior to the publication of the financial statements to the public, or otherwise, subject to sanctions by the SFC. On November 29, 2018, the SFC announced the commencement of proceedings in the Market Misconduct Tribunal against Health and Happiness (H&H) International Holdings Ltd (HKEx stock code: 1112) (“Health and Happiness”) for failing to disclose price sensitive information as soon as reasonably practicable. Health and Happiness was alleged to only disclose the deterioration of financial performance to the public until July 23, 2015 when the company and Luo Fei, the Chairman, Chief Executive Officer and Executive Director of Health and Happiness, have actually learned of the information from the consolidated management accounts of the company in mid-June 2015 (SFC, “SFC commences MMT proceedings against Health and Happiness (H&H) International Holdings Ltd and its Chairman for late disclosure of inside information”, November 29, 2018).

Japan Small Flag Japan

While it is not mandatory, most listed companies in Japan provide earnings guidance on a quarterly basis. As to the scope of earnings guidance, recently, some listed companies have ceased providing half-year forecasts of earnings ending up with full-year forecasts only, and this trend is slowly expanding.

Portugal Small Flag Portugal

Certain listed companies provide guidance on business prospects for the year and on dividend policy.

South Korea Small Flag South Korea

At the beginning of each quarter, certain public (listed) companies make fair disclosure of their potential operating performance upon calculating their performance of the immediately preceding quarter, and provide earnings guidance by means of making correction reports and re-issuing public disclosures on the relevant matters upon receiving the BOD’s approval on the company’s performance in the immediately preceding quarter. Public companies also engage investor relations and disclose business plans in compliance with the fair disclosure regulations.

Switzerland Small Flag Switzerland

Earnings guidance is provided by several Swiss companies although it is not a general standard. Among companies who do publish guidance, the level of detail, metrics as to which guidance is given and intervals/timeframes vary. Some companies give guidance on an annual basis (i.e., for the next financial year) with quarterly or semi-annual updates, while others do so with respect to a different timeframe (typically medium term).

United States Small Flag United States

Many public companies provide earnings guidance on a quarterly basis. Earnings guidance are forecasts issued by companies about how they expect to perform in the next quarter. The goal of earnings guidance is to provide shareholders and investors with helpful insight that they can use to evaluate the company’s earnings potential. Company-issued earnings guidance is different from required quarterly reporting, which is reporting of a company’s results for a completed quarter, or consensus estimates, which are reports of earnings performance forecasts from external analysts.

Recently, there have been a growing number of calls for companies to stop providing quarterly earnings guidance in an effort to mitigate the effects of “short-termism,” which prioritizes short-term goals over a focus on long-term results. Others have gone further calling for the end of all quarterly reporting. Despite this recent focus on quarterly reporting, the pace of quarterly earnings guidance does not appear to have slowed as of yet. In 2017, 146 companies in the S&P 500 provided earnings guidance 444 times, and through September 12, 2018, 128 companies in the S&P 500 had provided earnings guidance 321 times. In December 2018, however, the SEC issued a request for comment on earnings releases and quarterly reporting, which may result in changes to the quarterly reporting regime.

United Kingdom Small Flag United Kingdom

Practice around earnings guidance differs from issuer to issuer. Any information relating to performance relative to earnings guidance may be inside information and therefore disclosure should be considered in light of the relevant provisions of MAR. For further information on basic corporate disclosures, see question 16.

Italy Small Flag Italy

With sole reference to listed companies, pursuant to Art. 123-ter CFA, no later than 21 days prior to the date of the shareholders’ meeting called to resolve upon the yearly financial statements, the board of directors shall make available to the market a “report on remuneration”, setting out, with regard to (among others) board members and general managers (direttori generali), inter alia: (i) the general remuneration policy, (ii) a suitable depiction of each of the items composing the relevant remunerations, (iii) an analytical depiction of the remunerations paid during the latest financial year.

Specific provisions apply to banks and financial institutions.

Turkey Small Flag Turkey

In accordance with the article 12/(b) of Regulation on the Minimum Contents of the Annual Activity Reports of Companies, the prospective expectations must be included in the financial status of the annual financial activity report of the company.

Luxembourg Small Flag Luxembourg

According to the LSE Principles, listed companies shall form a remuneration committee which is to articulate policies for the remuneration policy of management or directors. Remuneration of management or directors, from an accounting perspective, is solely recorded on a global basis.

Ukraine Small Flag Ukraine

Earnings guidance is not common for Ukrainian companies. The law only requires public JSCs to state the company`s possible development perspectives in their annual management reports.

Egypt Small Flag Egypt

The Listed companies are required to publish their financial accounts quarterly on the EGC website.

Furthermore, the company is obliged to publish the end of year audited financial statement in two newspapers. Moreover, the governing body must discloses in the annual OGM of the company, the earnings among the discussion of the financial statement, board report, and dividends.

However, the listed companies have no obligation to issue any periodical forecast, guidance or disclosures about the future earnings of the company.

Updated: September 18, 2019