When a company releases quarterly earnings figures, any guidance that is issued is analyzed just as closely as the EPS and revenue numbers. But companies aren't required to issue guidance, and it's interesting to track the percentage of companies that do so each earnings season. We can think of two obvious reasons why a company wouldn't issue guidance -- 1) if there is simply too much uncertainty about the business environment and 2) if expectations are poor and the company wants to wait it out to see if it can turn things around before its next release.
Below we highlight the percentage of companies that have issued no guidance on a quarterly basis since 2002. As shown, when the market was in bull market mode during the mid-2000s, a lot of times less than 50% of companies would issue no guidance. When the financial crisis began in late 2007, the percentage began to steadily increase each quarter until it peaked in the same quarter that the market bottomed in Q1 '09. As the current bull market has progressed, more and more companies have begun to issue guidance, but this earnings season we have seen a huge spike in companies that haven't issued any guidance once again. Since earnings season began on July 11th, 412 companies have released numbers, and 65.8% of them haven't issued any guidance. This is actually .2% above the peak reading of 65.6% seen at the depths of the financial crisis. For those looking for proof that uncertainty abounds in the business world right now, there you have it.
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