What is guidance in business and finance?

In business and finance, the term "guidance" refers to a corporation's public broadcast regarding its quarterly or annual predicted earnings. This announcement is typically done during a conference call or through a webcast.

A publicly traded business organization or a company, which are ones that have stocks traded on one of the stock markets, usually provide guidance to direct expectations of projected revenue to what is feasible. There are instances when the analysis of estimated future earnings surpass what is attainable for a given span of time. To lessen the effect of negative surprise when the actual revenue is disclosed, the management issues a guidance beforehand.