Guidance

DEFINITION of 'Guidance'

Information that a company provides as an indication or estimate of its future earnings. Guidance is an "expected results" issue from a company to shareholders and market watchers as to how they envision a future period turning out. Such guidance will typically include revenue estimates, along with earnings, margins and capital spending estimates. Also known as "earnings guidance."

INVESTOPEDIA EXPLAINS 'Guidance'

Guidance reports estimating a company's future earnings can have a major influence over analyst stock ratings and investor decisions to buy, hold, or sell the security. For instance, if a company's management disseminates guidance figures which are well below what those on the Street would be expecting for a future period, the most likely outcome from analysts would be a downgrade or at the very least lowered estimates.

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