Glossary
Earnings guidance
A company's own forecast of its future revenue, earnings or other metrics, often given with quarterly results.
On this page
Earnings guidance is a public forecast that a company's management makes about its own future results: revenue, earnings per share, margins, capital spending or other key numbers for the next quarter or fiscal year. It is usually given as a range alongside quarterly results and discussed on the earnings call. Guidance often moves a stock more than the quarter just reported, because markets price the future and management knows its business better than outside analysts do.
How it works
Guidance is typically framed against the analyst consensus. When a company "raises guidance," it lifts its forecast range; "guiding below the Street" means its range falls under the consensus.
Since Regulation FD took effect in 2000, US companies must share material information like guidance with the public broadly, not privately with selected analysts, which is why guidance arrives in press releases, filings and webcast calls.
Things to know
- Not every company guides. Some give only annual figures, some give qualitative outlooks, and some, including several large companies, provide no earnings guidance at all, arguing it encourages short-term thinking.
- Conservatism. Many management teams set ranges they expect to beat. A "beat and raise" may be partly by design.
- Withdrawals. In a shock, guidance can be pulled entirely, as many companies did in early 2020.
- Legal framing. Guidance is a forward-looking statement accompanied by risk disclosures; it is not a promise.
- "Forward guidance" in central-bank language means something different: a signal about the likely path of policy rates.