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Strategies & Market Trends
Misleading Earnings Reports

An SI Board Since September 2000

Posts	SubjectMarks	Bans
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Emcee: Fundamentls	Type: Unmoderated

Introduction Compact

Have you noticed that GAAP seems to have gone out the window when many companies issue their earnings press releases? Yes, of course they follow GAAP when they do the official financials filed with the SEC. But more and more, companies excluding all sorts of real expenses from their "reported" earnings. Not just one-time stuff like restructuring charges, but ongoing things like stock option compensation charges, depreciation/amortization, or just about anything else management would rather deflect attention from.

This thread is dedicated to exposing the many tricks and schemes some companies are using to make their earnings look better than they really are. This can include window dressing stuff, or suspicions of outright accounting fraud.

It's gotten to the point that you can't tell whether many companies have met, beaten, or fallen short of analysts' estimates because you don't know which definition of "earnings" the analysts were projecting--see Post #2 below for an example.

The next thing you know, we'll see companies issuing pro forma earnings that exclude ALL executive compensation, on the grounds that the senior executives really aren't part of the day-to-day business.

Please post your examples of misleading approaches to earnings so that we can all beware of what to watch for. Discussion of these tactics is also welcome.

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Reply	Message Preview	From	Recs	Posted
53	Tell the Good News. Then Cash In. <i> By DAVID LEONHARDT ; A	~digs	-	4/8/2002
52	SEC to Charge Company With Misleading `Pro Formas' Washington, Dec. 18 (Bl	Fundamentls	-	12/24/2001
51	not necessarily misleading, but interesting none-the-less -------- Lawmakers Ai	~digs	-	10/9/2001
50	Message 16398135	~digs	-	9/22/2001
49	How's this for a confession that companies "manage" earnings numbe	Kevin Podsiadlik	-	7/11/2001
48	SEC Probes 'Pro Forma' Releases at Four Companies siliconinvestor.com	Fundamentls	-	6/21/2001
47	Looks like the rest of the world is starting to get the picture...... THE NUMBE	Fundamentls	-	5/7/2001
46	forbes.com Tim	TimF	-	5/4/2001
45	re:MOT from Briefing Motorola (MOT) 13.00 +1.50: Some confusion over MOT's	Fundamentls	-	4/11/2001
44	Here's another w/cash earnings.. biz.yahoo.com Rare Medium's Fourth Qu	xcr600	-	2/14/2001
43	PPRO reports something called a "Cash EPS" figure, which excludes &quo	Kevin Podsiadlik	-	2/12/2001
42	<b>Amazing Amazon: Losses Grow as They Seem to Shrink</b> by Floyd	Fundamentls	-	2/10/2001
41	Another interesting case of reporting EBE (earnings before expenses - with apolo	Fundamentls	-	1/26/2001
40	barb, even after getting a settlement, what's actually left for s/h makes th	Marty Rubin	-	12/25/2000
39	Here's some links to a story about Milberg: law-phoenix.uchicago.edu lawne	Mama Bear	-	12/21/2000
38	<i>" Milberg Weiss is not known for filing frivolous lawsuits.</i&	Mama Bear	-	12/21/2000
37	There is no way to know for sure, but Milberg Weiss is not known for filing friv	Fundamentls	-	12/21/2000
36	how can you tell whether the lawsuite is legit? most of those arn't, and lik	Marty Rubin	-	12/21/2000
35	Milberg Weiss Files Class Action Suit Against Gateway, Inc. SAN DIEGO--(BUSINES	Fundamentls	-	12/8/2000
34	Very interesting. Thx. BTW--THIS IS MY 2K's POST. Here're 2 re AMZN Q: &	Marty Rubin	-	10/27/2000
33	Smoke, mirrors No doubt a book is already in preparation detailing the mos	~digs	-	10/23/2000
32	Article by Dr. Briloff criticizing Cisco's financial reporting in latest Bar	Joe Fang	-	10/23/2000
31	Article by Dr. Briloff criticizing Cisco's financial reporting in latest Bar	Joe Fang	-	10/23/2000
30	This is too obvious. The problem is how thay got their numbers. The reason why t	Marty Rubin	-	10/20/2000
29	Nice thread. I don't know if this is more horrible reporting or misleading &	Win-Lose-Draw	-	10/19/2000

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