There has been several quarters in the past when Cisco closed the books early. No products were shipped during the last 1 or 2 weeks. May not have happened lately, but you can see how predictable this $0.01 'surprise' has become.
Customers are told that products will ship 1 or 2 weeks late because of mysterious manufacturing reasons.
i am also more enlightened on the 'Deferred revenue recognition' issue now (Thanks, John & Ron).
All of this seems legal (to me, just a bystander).
Something about managing WS expectations?
What else are companies supposed to do, when WS has q-to-q tunnel vision madness and is focused on earnings predictability?
Here are snippets from Google 'owner's manual':
As a private company, we have concentrated on the long term, and this has served us well. As a public company, we will do the same. In our opinion, outside pressures too often tempt companies to sacrifice long-term opportunities to meet quarterly market expectations. Sometimes this pressure has caused companies to manipulate financial results in order to "make their quarter." In Warren Buffett's words, "We won't 'smooth' quarterly or annual results: If earnings figures are lumpy when they reach headquarters, they will be lumpy when they reach you."
..
Although we may discuss long-term trends in our business, we do not plan to give earnings guidance in the traditional sense. We are not able to predict our business within a narrow range for each quarter. We recognize that our duty is to advance our shareholders' interests, and we believe that artificially creating short-term target numbers serves our shareholders poorly. We would prefer not to be asked to make such predictions, and if asked we will respectfully decline. A management team distracted by a series of short-term targets is as pointless as a dieter stepping on a scale every half hour. |
