The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Percentage of firms missing EPS forecast by 10% hits 18-month low

Recent accounting regulations appear to be improving the accuracy of companies' earnings forecasts.  The percentage of companies among the Standard & Poors 500 stock index that missed analysts' earnings-per-share projections by at least 10% fell to 29.7% in the 2004 third quarter.  That's the lowest level since financial management consultancy,  Parson Consulting, began the quarterly study in the 2003 first quarter.   

The decline in the wide-margin misses suggests that the Securities and Exchange Commission's (SEC) accelerated reporting deadlines and federal Sarbanes-Oxley Act is having a beneficial effect.  These regulations shortened the timeframe in which companies must report their quarterly and annual earnings to the SEC, while demanding transparency and accuracy of financial information.  This need to report more quickly to the SEC is leading companies to streamline their processes and employ more sophisticated financial systems that improve accuracy of forecasts, Parson experts say.

Commenting on the survey, Mark Hutchinson, Managing Director of Parson Consulting, UK says: "These findings show the key business benefits for companies complying with US regulations. With the forthcoming publication of Flint Review of Turnbull Guidance on Internal Control UK companies need to heed these positive outcomes. With more streamlined processes and integrated systems, the City will get better data and that should contribute to more 'hits' and fewer 'misses' during the forthcoming earnings season in the UK."

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree