Ford Axes Quarterly and Annual Guidance

Investors will likely view Ford’s decision today to refrain from offering future financial guidance as a negative. After all, it could very well indicate that the company either has no idea how their financials will look, or that they have little confidence in meeting the objectives they will set.

Even if true, companies should join Ford and realize that it’s too difficult and unproductive to accurately predict future profits, especially if you are managing a business for long-term success, not to simply meet investors’ short-term goals.

Wall Street might not like it, but now Ford could be better able to make the right decisions to get back on track. This is not an endorsement of the stock, as I have not looked closely at it, just a pat on the back for getting rid of guidance that benefits nobody except the research analysts who rely on it to do the bulk of their jobs.

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One Thought on “Ford Axes Quarterly and Annual Guidance

  1. David Hopkins on January 24, 2006 at 12:34 PM said:

    It will be interesting to see how this all plays out. Will F & GM go the way of the horse and buggies that they replaced almost a century ago, or will they be remade into lean, efficient 21st century businesses? Soft demand + no interest financing + incredible legacy costs + nimble, efficient Asian competitors = teetering on the edge. There are still fundamental problems in the equation above that need to be addressed before I would give either company a clean bill of health. Until then, I would not consider investing in either one. There are a lot of other investments that are much more appealing.

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