COVID-19: Withdrawing or Revising Earnings Guidance
As the COVID-19 pandemic continues to shock economies around the world, many public companies have determined that their previously issued guidance is no longer accurate. As of the date of this memorandum, more than 70 public companies across industries, including airline, retail, manufacturing, financial services, technology, communications, real estate, hospitality and agriculture, have either withdrawn or revised downward previously issued guidance, with the large majority opting to withdraw.
On March 4, 2020, the SEC issued conditional relief for public companies affected by COVID-19 that have SEC filings due between March 1 and April 30, 2020. The press release (the “Conditional Relief Release”) is available here. In the Conditional Relief Release, the SEC suggests that public companies may need to consider whether previous disclosure should be revisited, refreshed or updated to the extent that prior disclosures have become materially inaccurate. We highlight below some key areas of focus for public companies in considering whether to withdraw or revise guidance in light of the COVID-19 pandemic. Considering Whether to Issue Guidance in the Future
Public companies that historically issue guidance on an annual or quarterly basis may wish, or feel compelled by market expectations, to continue doing so. However, in light of the economic and business uncertainties caused by COVID-19, it may very well be prudent for public companies to forego issuing guidance until they are better able to produce reliable guidance.
Full article here: COVID-19: Withdrawing or Revising Earnings Guidance
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