Buffett, Dimon urge end to quarterly profit forecasts | AP business

Bitcoin's critics Warren Buffet and Jamie Dimon reiterate warning

They told companies to move away from providing quarterly guidance.

JPMorgan CEO Jamie Dimon, who has made negative comments about the cryptocurrency in the past, said during an interview Thursday with CNBC that while he doesn't want to be a "bitcoin spokesperson", buyers should "beware".

Feinberg has been advising the group since the three companies announced in January that they would form a healthcare company aimed at cutting costs for their US employees, but he ultimately emerged as a top pick to lead the initiative himself, a person familiar with the matter told CNBC.

Buffett and Dimon helped produce a set of voluntary governance guidelines two years ago, which was signed by more than one dozen executives.

Companies often hold back spending on technology, hiring, and research and development to meet quarterly earnings guidance that may be affected by factors outside the company's control, the business leaders wrote. "We are encouraging all public companies to consider moving away from providing quarterly earnings-per-share guidance". JPMorgan Chase reported lower fourth-quarter earnings January 12, 2018 on weak trading revenues and one-time costs from United States tax reform, partly offset by gains from higher interest rates.Net income for the quarter ending December 31 was $4.2 billion, down 37 percent from the year-ago period.

A less compelling argument is that corporate EPS guidance more or less anchors analysts' EPS estimates.

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"We think the president has raised some very critical issues about trade, especially with China, around state owned enterprises, fair competition, market access, the ability to own 100% of a company, and these things should be negotiated out and the Business Roundtable supports those issues", Dimon said.

But Buffett says the practice of CEOs providing a heads-up on how earnings-per-share results are shaping up often causes them to make poor decisions to ensure that the company beats or meets the results they've communicated to Wall Street. The two business gurus said quarterly financial guidance encourages short-term thinking that stifles growth and limits innovation in the economy.

Earnings guidance can lead management teams to under-invest in the future and can crimp earnings growth, according to a 2017 FCLTGlobal report.

The practice of forecasting has come under severe criticism in recent times with investors pressurising firms to deliver to their promises, said CNBC.

Dimon said Thursday that about 20 percent of Business Roundtable members still do quarterly guidance and about 60 percent provide annual targets.

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