Warren Buffett, Jamie Dimon: Quarterly profit forecasts hurt economy

Bitcoin Surprise Surprise! Jamie Dimon and Warren Buffet Still Don’t like Bitcoin Rick D

Bitcoin Surprise Surprise! Jamie Dimon and Warren Buffet Still Don’t like Bitcoin Rick D

Warren Buffett and Jamie Dimon have teamed up to once again call for the end to quarterly earnings guidance by companies.

"I've never seen a company whose performance has improved by having some forecast out there by the CEO that we're going to earn X", Buffett said.

In the op-ed, Dimon and Buffett said the pressure to meet short-term earnings estimates has contributed to a drop in the number of public companies in the United States in the past two decades.

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Billionaire investor Warren Buffett and JPMorgan Chase (JPM.N) Chief Executive Jamie Dimon voiced concerns that the financial markets' focus on short-term goals is hurting the economy and urged companies to move away from providing quarterly earnings guidance, according to the Wall Street Journal.

On Thursday morning, the Business Roundtable which includes CEOs of USA companies with more than 16 million employees and more than $7 trillion in annual revenues, weighed in supporting the proposal.

Buffett defended his argument in an interview with CNBC on Thursday morning.

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"When companies get where they're sort of living by so-called making the numbers, they do a lot of things that really are counter to the long-term interests of the business", Buffett told CNBC Thursday.

Buffett and Dimon helped produce a set of voluntary governance guidelines two years ago, which was signed by more than one dozen executives. JPMorgan Chase reported lower fourth-quarter earnings January 12, 2018 on weak trading revenues and one-time costs from U.S. 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. They have said the practice of telling Wall Street what to expect from earnings can distort management's priorities.

Several big companies like AT&T, Coca Cola, Facebook and UPS have stopped issuing quarterly earnings guidance. While the companies didn't give much detail at the time, the announcement prompted broad speculation and unease among investors, sending shares lower for health-system companies including insurers and pharmacy-benefit managers.

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