The guidance "often leads to an unhealthy focus on short-term profits at the expense of long-term strategy, growth and sustainability", the two powerful CEOs wrote in a commentary piece in the The Wall Street Journal.
On Thursday morning, the Business Roundtable which includes CEOs of US companies with more than 16 million employees and more than $7 trillion in annual revenues, weighed in supporting the proposal. "We're hoping a bunch of companies drop it right away". JPMorgan Chase reported lower fourth-quarter earnings January 12, 2018 on weak trading revenues and one-time costs from United States 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.
It is a long-simmering debate but one that has gotten more attention in an era when activist investors are more vocal about pushing companies to deliver on their promises.More news: Xi, Modi Hold Bilateral Talks in China, Agree to Improve Ties
However, those favouring the practice vouch that it improves communications with Wall Street, reduces share price volatility and boosts a stock's value, the report 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 USA in the past two decades.
After several controversial statements about bitcoin, the chief executive of JPMorgan Chase Jamie Dimon again tells people to "beware" when trading in the cryptocurrency. About 31 percent gave annual earnings-per-share guidance.
The two men noted that companies often hesitate to spend on technology, hiring, and research and development in order to meet quarterly earnings guidance that can be impacted by seasonal factors beyond their control, such as political events and even weather.