Companies Increasingly Quiet About the Future
MSNBC (04/19/09)
Intel reported stronger-than-expected results for the first quarter April 14, but did not forecast revenue due to the uncertainty in the economy. Other companies have declined to provide a specific revenue forecast as well. According to The Hackett Group, companies are having problems estimating cash flow as a result of the credit crunch, which has made it more difficult to produce accurate quarterly estimates. The Hackett Group reports that more than 60 percent of companies say they cannot accurately forecast cash flow within 10 percent and that more than 90 percent say they cannot do so within 5 percent. Meanwhile, the National Investor Relations Institute (NIRI) says a third of 600 companies in a recent survey changed their policies on financial guidance, primarily by eliminating or limiting the guidance about earnings and revenue. "If you don't know what the future holds and you can't accurately predict it, you don't want to be out there telling somebody something you don't have confidence in," says NIRI President and CEO Jeffrey Morgan.
