Earnings guidance for investor decision-making

Overall, earnings guidance is useful for investors in their decision-making. It may, however, damage shareholder wealth when the quality of the information is low. To improve information quality, good news guidance should include more details as to why and how management arrives at a particular estimate, while bad news guidance should be released in a timely manner. (Read the article on Relevant and timely, please in the November 2007 issue of CAmagazine online.)