Coke Makes A Change

by john on December 13, 2002

The Coca-Cola Company will no longer be providing earnings estimates.

This could be huge. Or it could be a temporary response to some tough quarters ahead, who knows. But I’m betting other companies will fall into line.

I’ve worked for a private company that went public and one of the most disheartening aspects of that transition was the new focus on each quarter as a separate entity. When we were private we thought long term. When we were public, and in fact in the year leading up to our IPO, we thought short term. Quarter by quarter. It isn’t a good way to run a business but it seems what the market demands. Perhaps we can trend away from that if we aren’t slaves to hitting earnings estimates.

Additionally this will mean companies are less likely to “tweak” the numbers. Cisco, for example, was famous for quarter after quarter exceeding the earnings estimate by 1 cent. Come on, you can’t do that without some creative accounting. Without the numbers being public they can focus on the important stuff – like improving their Cisco routers!

In a new era of corporate responsibility and openness to shareholders I do not see this as withholding data as some people might – the data was never to be trusted anyway, so I’m hoping more do what Coke is announcing and stop giving earnings estimates, only general guidance.

{ 2 comments }

john December 13, 2002 at 9:40 am

Just a side note – I used to spend some time dealing with The Coca-Cola Company as a vendor. It was interesting to me to see in the news release they were referred to as Coca-Cola Co. because when I worked with them they were very insistent that all references to them in our software systems was as “The Coca-Cola Company”

Lamar Cole October 8, 2005 at 4:46 pm

Love is two people sipping Coca Cola from the same straw on a warm sunny day.

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