Peter McKay wrote an interesting article in the Wall Street Journal yesterday titled "Earnings Game: Why 'Guidance' May Not Matter." The story highlighted that from 2001 to 2006, companies that issue quarterly guidance have beaten estimates 63% of the time, while companies that do not issue guidance have beaten 63% of the time (according to Thomson Financial). Since there is such a close spread between the two "beat" rates, the case can be made that quarterly guidance numbers do not do a great job of helping analysts make better estimates.
However, looking at the "miss" rates of companies issuing guidance versus ones that do not seems to show that guidance does matter. Companies that issue no guidance have missed estimates 21% of the time, while companies that do have missed just 11% of the time. When a company issues guidance, it seems that analysts are able to better predict if it is going to report poorly than if it is going to report well. Based on this data, it appears as though companies who issue guidance look to set expectations for the coming quarter at a low and easily beatable level (under promise and over deliver). If they see weakness in a certain unit, they tend to make the analyst community aware of it in order to manage expectations and avoid shareholder litigation. Companies that do not issue guidance, on the other hand, give analysts no base range to work with.