Change and Innovation in Financial Guidance...

In my first blog this year, “2009 –Year of Change”, I’ve mentioned this...

“It is great to see certain leaders stating that they will desist giving Quarterly projections!!!”

refering to GE’s decision to stop giving Quarterly Earnings. Now, according to Microsoft’s recent quarterly results,

“Microsoft is no longer able to offer quantitative revenue and EPS guidance for the balance of this fiscal year due to the volatility of market conditions”

To me it sounded revolutionary as this allows CEOs to focus on long-term growth rather than focusing energy meeting short-term quarterly earnings to please the analysts and the stock market. While this has already resulted in some down swings for MSFT stock, I think, it will be good for larger companies like GE and MSFT.

With a 50+ billion revenue stream, this change becomes more necessary to de-focus on short term and to take strategic long term initiatives.

Now that the external quarterly pressure is gone, I am sure, these companies will be meticulous in driving themselves to setting aggressive quarterly targets and drive operational efficiency to measure, monitor and meet them internally.

All the best GE and Microsoft... You are leading the “Change and Innovation in Financial Guidance”