Newspaper article The Florida Times Union

Florida Rock CEO Chooses to Disclose Earnings

Newspaper article The Florida Times Union

Florida Rock CEO Chooses to Disclose Earnings

Article excerpt

Florida Rock Industries Inc.'s stock fell $4.75 to $34.13 last Monday after the Jacksonville-based construction materials company said earnings for the fourth quarter ended Sept. 30 would be 57 cents to 60 cents per diluted share, below the year-earlier earnings of 67 cents and well below the consensus analyst estimate of 85 cents.

Since the company's fiscal year ended Sept. 30, Florida Rock won't release its final numbers for the quarter until its audit is complete and its board of directors meets on Dec. 6. But president and chief executive officer John D. Baker II didn't want to wait until December to announce the results.

"We just felt since there was a significant discrepancy between the expectations of the street and what our earnings were, and we knew our earnings, we should get them out," Baker said last week.

Baker said the announcement wasn't motivated by the Securities and Exchange Commission's new disclosure requirements, which went into effect on Oct. 23 and require public companies to disseminate information more openly. He just thought it was the right thing to do.

"I just felt like it was bad policy to wait that long when the expectations were that different," he said.

Of course, not all corporate CEOs feel that way. In the past, some would disclose information about earnings selectively to a handful of analysts before announcing it to the general public, giving some investors an advantage. The SEC regulations are designed to level the playing field.

That won't necessarily make the stock market more predictable, said Jack Ablin, managing director of Colonial Asset Management in Ponte Vedra Beach.

"In general, I think it is adding to volatility in the market," he said.

As an example, Ablin pointed to Home Depot Inc., which fell 29 percent in one day last month -- its biggest one-day drop ever -- after announcing its third- and fourth-quarter earnings would be lower than expected. In the past, the company may have disclosed that gradually to analysts over a period of a couple of weeks. …

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