Earnings Guidance

Earnings guidance means a company’s estimate or forecast for future profit. In simple terms, earnings guidance tells investors how much profit the company expects to make. Earnings guidance is important because it helps investors judge future profitability. A company may report strong current earnings but still disappoint investors if future earnings guidance is weak. For example, if a company expects next quarter EPS to be between $1.20 and $1.40, that is earnings guidance. Earnings guidance is not the same as reported earnings. Reported earnings show what already happened, while earnings guidance estimates what may happen next.