Issuing Guidance to Reign in Expectations
A few quarters after a product launch, a public specialty pharmaceutical company was struggling to meet Wall Street expectations, as the covering sell-side analysts continued to be overly optimistic with sales estimates. To that date, the company had not provided any financial guidance.
ICR Westwicke’s Role
As its IR advisor, ICR Westwicke was tasked with recommending whether or not to provide guidance, and if the decision was to go forward with guidance, crafting a strategy for providing guidance.
- Collected feedback for the investment community regarding expectations and desire for increased financial guidance
- Evaluated the company’s current financial model
- Advised the company to proceed with providing financial guidance after evaluating potential scenarios
- Crafted the press release providing the initial guidance
- Crafted a script for management
- Prepared detailed Q&A document of potential analyst questions
Results
Management provided guidance, which was well-received by Wall Street. The company hit expectations for the next few quarters and volatility in the stock was reduced. Given the response, management continues to provide guidance.