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by lgiordano_notte
424 days ago
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they’re supposed to if the deviation is material. that’s what “pre-announcements” are for. but it’s a gray area unless it’s something truly drastic. a 32% QoQ drop probably qualifies, but companies sometimes gamble that the full context will soften the blow on earnings day. |
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A company is not required to update any previously given guidance and can just let their quarterly reporting speak for itself.
The reason why most companies give guidance, which they re not required to and many companies don't, is to manage wall streets expectations.
So given that, you can see why they'd update their guidance for material changes, though under REG FD they are not required to update guidance once they learn its incorrect.
They do modify their guidance so as to not surprise analysts on earnings releases and again as a way to manage expectations.
But as to the question asked, no they are not required to modify their guidance, even if they learn its not true.