Microsoft reported its quarterly “better than expected” profits. The numbers were surprising only to people who haven’t been clued into a cynical game of charades played every three months by Microsoft, Wall Street analysts and journalists.
Here’s how it goes, almost without exception. Microsoft gives what it calls guidance to the analysts, who then put out reports predicting the company’s earnings, which are routinely “higher than expected,” according to an equally compliant financial press that plays along with the charade. It would be useful if journalists actually looked up their stories from prior quarters and noticed some oddly similar circumstances.
Microsoft isn’t the only company that does this. Yahoo’s quarterly routine is pretty much identical, for example, with numbers surpassing the alleged expectations. Exceeding so-called expectations is becoming crucial for high-growth tech companies.
I guess some things haven’t changed in the year 2000.