Wednesday, December 17, 2008

GE Changes Disclosure and Guidance Policy

General Electric (GE) announced guidance for the remainder of 2008 (like two weeks left) and the all important 2009. What is particularly important is that they are stepping away from quarterly guidance. Personally I applaud the change; quarterly guidance is fraught with dilemmas, coded talk and alchemy like divinations.

What we will need to monitor is the way executives now speak to the marketplace when they do MD&A type discussions. In the past everything was summarized in the number. Now investors and analysts will have to pay attention. What GE did not explain was how often they would be announcing changes or tune ups or tweaks to the annual guidance.