Quarterly profit forecasts hurt economy, say Warren Buffett, Jamie Dimon

Quarterly profit forecasts hurt economy, say Warren Buffett, Jamie Dimon

Business Roundtable said it supports companies moving away from offering quarterly guidance and focusing on long-term goals.

Warren Buffett and Jamie Dimon are doubling down on their plea for corporations to stop providing quarterly earnings guidance.

Dimon, the chairman and CEO of J. P. Morgan Chase, and Buffett, chairman and CEO of Berkshire Hathaway, wrote about the group's endorsement in an opinion column in The Wall Street Journal.

They argue that short-term guidance has encouraged companies to hold off on technology spending and hiring and research, and has even discouraged many private companies from going public at all. JPMorgan Chase reported lower fourth-quarter earnings January 12, 2018 on weak trading revenues and one-time costs from USA tax reform, partly offset by gains from higher interest rates.Net income for the quarter ending December 31 was $4.2 billion, down 37 percent from the year-ago period.

In the op-ed, Dimon and Buffett said the pressure to meet short-term earnings estimates has contributed to a drop in the number of public companies in the U.S. in the past two decades. Around that time, big companies like Coca Cola, UPS and AT&T said they would no longer give quarterly guidance.

How are Manchester United-bound Fred's World Cup chances looking?
They will also face group matches against Costa Rica and Serbia, before hopefully progressing to the knockout stages. The Manchester United man's injury was described by the Brazil team doctor Rodrigo Lamas as a "trauma in his ankle".

However, companies that are in favor of issuing guidance say that it improves communications with Wall Street, lowers share price volatility and results in higher valuations.

"When companies get where they're sort of living by so-called 'making the numbers, ' they do a lot of things that really are counter to the long-term interests of the business", Buffett said.

Dimon, Buffett and BlackRock Inc.'s Laurence D. Fink urged companies in 2016 to refrain from short-term earnings forecasts in a letter and report with other financial industry executives.

Dimon said Thursday that about 20 percent of Business Roundtable members still do quarterly guidance and about 60 percent provide annual targets. "Such short-termism is unhealthy for America's public companies and financial markets - which are critical to economic growth and financial prosperity", Business Roundtable said in a statement.

Related news:

Hot News

isis-killer-beheading-video-story-top Chris Bosh believes former teammate LeBron James could join the Rockets
Jun 09, 2018 - 16:57
After that, he has the option to opt out of his deal and test the waters of free agency for the first time in his career. And let's not forget the biggest reason Irving would likely want to play in Madison Square Garden-Kristaps Porzingis.

isis-killer-beheading-video-story-top Woods to stay on yacht during US Open
Jun 09, 2018 - 15:25
Woods purchased the 155-foot yacht for $20 million back in 2004, as a wedding gift for Swedish model Elin Nordegren . Woods has been out of golf for most of the past two years and his world ranking fell out of the top 1,000.

isis-killer-beheading-video-story-top Trump says Russian Federation should be at G7 meeting, Moscow not so sure
Jun 09, 2018 - 14:52
There will be no formal bilateral meeting between Trump and British Prime Minister Theresa May during the summit this year. He did not reply but Trump grinned broadly and said "he's happy" before appearing to stick out his tongue.

isis-killer-beheading-video-story-top Yellowstone bison gores Bay Area woman
Jun 09, 2018 - 14:50
As noted by Yellowstone officials: animals in Yellowstone are wild and unpredictable, no matter how calm they appear to be. The bison reportedly became agitated when it crossed the boardwalk and charged the crowd, goring Hancock.

isis-killer-beheading-video-story-top US issues new alert for China
Jun 09, 2018 - 14:47
Those affected have suffered a range of symptoms including hearing loss, dizziness, fatigue, cognitive issues and sleep loss. There have been several reports of possible sonic attacks at the USA consulate in Guangzhou , China.

Taliban announces three-day ceasefire over Eid
Jun 09, 2018 - 14:40
Ghani has urged ceasefires with the Taliban before, but this was the first unconditional offer since he was elected in 2014. President Ashraf Ghani on Thursday declared an apparently unilateral week-long ceasefire with the Taliban.

isis-killer-beheading-video-story-top RIP Yahoo Messenger (1998-2018): Oath Shuts It Down On July 17
Jun 09, 2018 - 14:37
Oath took this opportunity to remind everyone about Yahoo Squirrel , which is an invite-only group messaging app, now in beta. We looked at some when Aol shut down its Messenger, and the list of alternatives is fine for Yahoo Messenger users as well.

isis-killer-beheading-video-story-top Marko Arnautovic dismisses Manchester United speculation
Jun 09, 2018 - 14:24
The only thing that bothers me is that I am in a good health and that I am able to play football. Whatever happens will happen. 'Even three weeks ago I haven't heard anything.

isis-killer-beheading-video-story-top Nadal eyes 11th French Open title as clock ticks
Jun 09, 2018 - 14:13
World number one Nadal went into Friday's clash with a 9-5 career record against Del Potro, including all three meetings on clay. The 24-year-old Thiem is now a Grand Slam finalist for the first time , but he has been trending in this direction for a while.

isis-killer-beheading-video-story-top FTSE fails to open, LSE says opening auction delayed
Jun 09, 2018 - 12:02
A spokesperson for the London Stock Exchange said the opening auction had been held up because of an issue with pricing data. The shares were sold at an average price of GBX 4,182 ($55.68), for a total value of £1,700,359.38 ($2,263,825.56).

isis-killer-beheading-video-story-top The curious case of Jupiter’s lightning, solved by the Juno craft
Jun 09, 2018 - 11:58
More frequent Jovian lightning at the poles indicates that water-laden gas in the atmosphere circulates towards the poles. However, when NASA's Voyager 1 probe made a flyby of Jupiter in March 1979, there was a bit of a surprise.

Death reported at Bonnaroo Music and Arts Festival
Jun 09, 2018 - 11:51
Coffee County sheriff's spokesman Lucky Knott says officials are investigating the cause of death but foul play is not suspected. The Daily News reports that local authorities confirmed a male was found dead in the festival's campgrounds around 10 a.m.

isis-killer-beheading-video-story-top Celebrity Chef Anthony Bourdain Dead at 61
Jun 09, 2018 - 11:02
Black Hoof owner Jen Agg said she was devastated when she heard the news. "I would have had a different answer a few years ago. Parts Unknown saw Bourdain travel the world, addressing political issues and sampling local food and culture.

isis-killer-beheading-video-story-top Kamila Shamsie's 'Home Fire' wins Women's Prize for Fiction | AP entertainment
Jun 09, 2018 - 10:56
Numerous well wishes and praise poured in for Shamsie from around the world. The author is also quite vocal about her support of female authors.

isis-killer-beheading-video-story-top Oregon State Beavers pitcher Luke Heimlich goes undrafted for second straight year
Jun 09, 2018 - 10:13
One of the most controversial prospects in draft history was not selected by an Major League Baseball team. On the field, the southpaw put together a 15-1 record with a 2.42 ERA and 142 strikeouts in 111.2 innings.