Ending Quarterly Earnings Guidance?

According to a report today in the FT by Jeremy Grant ("US reform sought to aid capital markets"), the US Chamber of Commerce will call today for an end to quarterly earnings guidance from companies.

This is eminently sensible on classical grounds as well as more modern ones.

The classical grounds are there is no logic to "quarterly" guidance since a "quarter of a year" relates to no natural period of time. "Annual guidance" makes sense because it does relate to a significant natural division of time.

So why not "monthly guidance? Or "daily guidance"? Well, anything less than annual guidance encourages short-termism in a marketplace that is already short-term enough.

The modern grounds are that most traders already have enough information, even on a moment-by-moment basis to adjust their investment behaviour (rightly or wrongly), so quarterly guidance merely adds effort and expense for hard-worked Chief Executives and Investment Relations teams, and produces little or no benefit for companies in terms of Return on the Investment made. In other words, if all companies were prohibited from producing anything other than annual guidance, then money, time and effor could be put into more productive activities instead.

What has taken the US Chamber of Commerce so long to wake up to these elementary matters?
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