Joseph Fuller and Michael C. Jensen are suggesting that managers begin discussing their business’ strategy and get out of the earnings guidance game. In their recent paper, Just Say No to Wall Street: Putting A Stop to the Earnings Game, they tell managers to stay away from earnings guidance and provide information about strategic goals, main value drivers, the risks associated with these drivers and how management intends to address these risks.
They see earnings guidance often results in a no-win game, with expectations met only by abandoning long-term strategy and destroying value in search of short term EPS goals set by folks outside the corporate halls.