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Media coverage highlighting companies' inability to meet analysts' expectations - often disregarding respectable growth by the same companies - is nowadays a very common occurrence. In the face of increasing attention to analysts' expectations an increasing focus on so-called "earnings guidance" has arisen. The present work focuses on the issue of how listed companies deal with analysts' expectations. Marisa Nöldeke presents a comprehensive review of academic disclosure and transparency literature in conjunction with the results of an anonymous questionnaire of transparency and earnings surprises in Germany and Switzerland. Further, through the investigation of short-term management forecasting behaviour as an instrument of earnings guidance, she draws the conclusion that managers have indeed come under increasing pressure to provide their own short-term forecasts. This is done in order to actively "walk down" analysts' forecasts.
About the author
Marisa Nöldeke (1979) studied Economics and Business Administration (major subject “Finance”) at the Humboldt-Universität zu Berlin, Germany, and the University of Zurich, Switzerland. During this time she participated in an MBA exchange visit at the Fisher College of Business, Columbus Ohio, USA. Upon successfully graduating with a Master’s Degree in
Finance in the end of year 2003, she progressed on an academic path as a doctoral student and research assistant at the Swiss Banking Institute, University of Zurich. Here she was a member
of Prof. Dr. Rudolf Volkart’s team. Parts of her doctoral studies were spent as a Visiting Scholar at the Leonard N. Stern School of Business, New York University. At the Swiss Banking Institute, she performed several teaching activities at undergraduate, graduate and executive education program levels. She was also a research fellow of the University Research Priority Program “Finance and Financial Markets”. She attained her Doctorate with her
dissertation completed in November 2006.
Summary
Media coverage highlighting companies’ inability to meet analysts’ expectations – often disregarding respectable growth by the same companies – is nowadays a very common occurrence. In the face of increasing attention to analysts’ expectations an increasing focus on so-called "earnings guidance” has arisen. The present work focuses on the issue of how listed companies deal with analysts’ expectations.
Marisa Nöldeke presents a comprehensive review of academic disclosure and transparency literature in conjunction with the results of an anonymous questionnaire of transparency and earnings surprises in Germany and Switzerland. Further, through the investigation of short-term management forecasting behaviour as an instrument of earnings guidance, she draws the conclusion that managers have indeed come under increasing pressure to provide their own short-term forecasts. This is done in order to actively "walk down” analysts’ forecasts.
