The Coca-Cola Co. announced last week that from now on, it will not provide quarterly and annual earnings guidance because, in the words of chairman and CEO Douglas Daft, "We believe that establishing short-term guidance prevents a more meaningful focus on the strategic initiatives that a company is taking to build its business and succeed over the long-run.”
Daft said, "We are quite comfortable measuring our progress as we achieve it, instead of focusing on the establishment and attainment of public forecasts. Our share owners are best served by this because we should not run our business based on short-term ‘expectations.’ We are managing this business for the long-term."
Daft said, "We are quite comfortable measuring our progress as we achieve it, instead of focusing on the establishment and attainment of public forecasts. Our share owners are best served by this because we should not run our business based on short-term ‘expectations.’ We are managing this business for the long-term."
- KC's View:
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Bravo, Coke!
Frankly, while we report a lot of these earnings-and-expectations statements, we’ve always found them to be counter-productive to the long-term conduct of business.
Ideally, this will mean that business won’t be conducted for the benefit of analysts.
