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Barry Diller Blasts Corporate Earnings Guidance, Calls It 'Wasteful' Exercise

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Barry Diller Blasts Corporate Earnings Guidance, Calls It 'Wasteful' Exercise

The economy will "eventually" rebound but in the meantime, companies are wasting time trying to come up with quarterly or yearly guidance, Barry Diller, chairman of Expedia Group Inc (NASDAQ: EXPE) and IAC/InterActiveCorp (NASDAQ: IAC), said on CNBC's "Squawk Box."

What Happened

There is little doubt the economy will rebound but the timeline is as uncertain as can be. Meanwhile, the concept of public companies trying to model their outlook to their investors is "wasteful" and the finance team should spend the time "doing some work" instead.

"Spend your time actually figuring out where you should invest your money, how you should run your company," Diller said. "And anyone who runs their company for a quarter is a bird-brain."

Why It's Important

Diller said the whole concept of guidance "is nuts" as it incentivizes companies to model ideally suited for a beat-and-raise earnings report. Also, what exactly does it say about a company beating its own internal projections it calculated three or six months ago?

"I'd love it as a practice to end for everybody," he said.

What's Next

Guidance is a "bad business" and will no longer be offered at both Expedia and IAC, Diller said. Instead, one of the two companies is considering issuing monthly reporting of some of its metrics.

This level of transparency "kind of makes sense" and might even be "healthy."

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