Dimon, chairman of the Business Roundtable, noted that the group of CEOs also support companies moving away from the practice and instead, focus on long-term value creation. "We should have an announcement on that matter within maybe two weeks".
Dimon, is chairman of the Business Roundtable, an association of almost 200 CEOs that is also backing the push to eliminate so-called short-termism. They have said the practice of telling Wall Street what to expect from earnings can distort management's priorities.
In a CNBC "Squawk Box" program interview and an opinion piece published in the Wall Street Journal, Buffett and Dimon said quarterly forecasts, known on Wall Street as "guidance", take up management's time and lead to decisions that don't benefit companies or their shareholders. "You hurt your allies more than anyone else, people tend to retaliate and you can incite nationalism in countries because it's not the same thing as if you and I were negotiating and being tough on each other... it can create these potentially negative outcomes". "Business just doesn't work that way".
They argue that short-term guidance has encouraged companies to hold off on technology spending and hiring and research, and has even discouraged many private companies from going public at all.
Dimon said Thursday that about 20 percent of Business Roundtable members still do quarterly guidance and about 60 percent provide annual targets. Stock prices can go up or down based on whether a company exceeds or falls short of the prediction it has made three months earlier, often increasing the amount of trading in the company's stock. JPMorgan Chase reported lower fourth-quarter earnings January 12, 2018 on weak trading revenues and one-time costs from U.S. tax reform, partly offset by gains from higher interest rates.Net income for the quarter ending December 31 was $4.2 billion, down 37 percent from the year-ago period.
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