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- Publisher
- Wiley
- Copyright
- "Copyright © 2018 Cantillon and Mann"
- ISSN
- 1078-1196
- eISSN
- 1745-6622
- DOI
- 10.1111/jacf.12315
- Publisher site
- See Article on Publisher Site
Abstract
In this excerpt from his forthcoming book, A Cure for Corporate Short‐Termism, the author begins by noting that many corporate management teams “unwittingly foster a culture of short‐termism” that ends up reducing the long‐run value of their companies. Such a culture starts with the process that surrounds quarterly earnings, in which managers seek to “guide” and then beat the analysts' consensus for EPS. But even if the market seems to deal harshly with companies that “miss” consensus, the author's own research shows that when viewed over periods of a year or more, it is the changes in earnings and cash flows that drive returns for shareholders, and not management's consistency in meeting the analysts' expectations.
Journal
Journal of Applied Corporate Finance – Wiley
Published: Dec 1, 2018