Jettisoning targets
Published: August 8 2008 03:00 | Last updated: August 8 2008 03:00
Guidance has always been a game. In spite of ever-stricter regulations on “fair disclosure”, companies still play warmer-now, colder-now with analysts who want to check their numbers against the investor relations team. It is still commonplace for companies to beat down analysts’ expectations before the earnings season, only to trump them with actual results, and watch their share prices enjoy a quick blip. But what about more extreme cases – such as when companies say they do not have a clue?
BMW and Allianz are among those to have recently thrown in the towel. Following the lead of the luxury carmaker, which last week abandoned its guidance for this year and 2009, the German insurer yesterday dropped its forecast of 10 per cent profit growth for this year and next, saying market conditions made “accurate earnings predictions” impossible.
Investors like predictability and normally punish such miscreants. In some cases, chief executives walk the plank. Think of Phil Watts at Royal Dutch Shell or the débacle at Dutch retailer Ahold. In less extreme examples, where companies bemoan poor visibility, share prices tend to suffer – at least over the short term. Allianz, by contrast, has emerged relatively unscathed: its shares were down only a hair. Similarly, since BMW tore up its earnings target, its stock price has even done better than that of rival Porsche.
Abandoning targets is an understandable sign of the times. In the late 1990s, after the Asian crisis, engineering companies that sold machinery to rapidly industrialising nations were lost in the mist. The same was true of airlines after 9/11. Now it is the turn of banks, insurers – or any other company with large financial operations, such as car leasing. Admitting you do not know is simply to recognise reality. The alternative is to commit bloopers such as John Thain’s claim that Merrill Lynch had no need for extra capital or the comment by Lehman’s Dick Fuld that the worst was behind it.
Copyright The Financial Times Limited 2008
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Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
Deterding was the guest of Hitler during a four day summit meeting at Berchtesgaden. Sir Henri and Hitler both had ambitions on Russian oil fields. Only an honored personal guest would be rewarded with a private four day meeting at Hitler’s mountain top retreat.
IN JULY 2007, MR BILL CAMPBELL (ABOVE, A RETIRED GROUP AUDITOR OF SHELL INTERNATIONAL SENT AN EMAIL TO EVERY UK MP AND MEMBER OF THE HOUSE OF LORDS: 
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