TAKING THE PULSE Quarterly Guidance Practices
While quarterly earnings guidance has become less prevalent as more public companies shift to communicating guidance on long-term strategy and value drivers, some companies still choose to provide quarterly guidance. The NIRI Pulse Poll survey conducted in June 2024 examined the practices and perspectives surrounding
quarterly earnings guidance among investor relations professionals. According to the data, 64% of respondents provide long-term guidance, while 19% provide quarterly guidance. Types of guidance included revenue (39%), earnings before interest, taxes, depreciation, and amortization (EBITDA) (27%), profit margin (8%), sales growth (6%) and capital expenditure (4%). Survey respondents identified benefits of issuing quarterly guidance as minimizing stock price volatility (52%),
building good relationships with the investment community (36%), raising long-term stock value (18%), and managing/reducing the variability of consensus (10%). They also identified six key audiences for receiving guidance shown in the chart below. IR
Primary Audiences: Quarterly Vs. Long-Term Guidance
Percent of Respondents Providing Quarterly Guidance
Sell-Side
Current Institutional Shareholders Potential Institutional Shareholders Hedge Funds Retail Investors
Internal Use (Employees)
Board Materials: 89% of respondents include quarterly consensus estimates in board materials.
67% 52% 46% 21% 6% 2%
Impact of Consensus: 26% of respondents feel that the need to hit quarterly consensus estimates leads to deviation from long-term strategy.
Percent of Respondents Providing Long-term Guidance
63% 67% 61% 24% 8% 4%
90% of respondents would not delay a positive net present value (NPV) expenditure to meet quarterly guidance.
METHODOLOGY: IR professionals spanning all industries and market caps were surveyed in June 2024. Results are based on 52 anonymous responses. Respondents were comprised of IR professionals from small- to mid-cap companies (65.3%), followed by large- and mega-cap companies (25%), and micro-cap companies (9.6%). This survey was conducted in partnership with FCLT Global.
36
S UMMER 2 0 24 ■ IR UPDAT E
niri.org/ irupdate
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40
