Guidance

What Is Company Guidance?

Guidance is a report released by a public company to its shareholders. This report explains the company’s earnings expectations for the forthcoming quarter, the rest of the year or next year.

Guidance is a forward-thinking statement that estimates what the company believes is possible. This report is often referenced in news reports when quarterly reports become public. Investors hear things like, “better-than-expected EPS,” “better-than-expected sales,” or “better-than-expected revenue.” Often, those expectations are set by the business itself. 

What Is Included in a Guidance Report?

Guidance reports often include:

• Sales projections
• Market conditions
• Company spending
• Inventory
• Units sold
• Cash flow

Once known as a whisper number, these figures were only given to wealthy traders and brokers. Under federal law — Regulation FD — this information is made public — freely available to all.

Keep in mind, however, that companies can get their estimates wrong. Companies are also not obligated to update their guidance reports if circumstances change just prior to their release. 

Check out Benzinga’s guidance calendar so you know when companies in which you are interested — or have invested — are issuing guidance for the forthcoming quarter.