Earnings calls in H1 2025 have revealed that a significant number of companies across various sectors cited the high level of uncertainty surrounding our government’s trade policies - specifically, the impact of tariffs with moving targets - as a reason to lower guidance or withdraw it entirely. 

Two examples come to mind: General Motors suspended its earnings guidance and share buyback program; similarly, Delta Airlines pulled guidance only to reinstate it shortly thereafter. 

In contrast, some companies are maintaining guidance with varying approaches to how they are addressing or offsetting the potential tariff impact. They included Danaher, RTX, 3M, AbbVie, and Home Depot.

While the specific impact varies depending on the company's exposure to international trade and their strategies for dealing with costs, one thing is true across industries:  In times of uncertainty, best practices in investor communications call for transparency.

Not only is this not the time to cut off lines of communication about your company’s revenue, margin, and supply chain strategy, but unless it is absolutely impossible to back out the impact within a range, then and only then should you pull guidance entirely. 

The CEO of Thermo Fisher, Marc Casper, did a stellar job in April addressing the tariff problem. While it didn’t hurt that they beat analyst estimates, the forward-looking statement was clear and quantitative: Paraphrasing the transcript: We now see adjusted EPS for the full year a dollar lower at the midpoint, or $22.30 (analyst mean estimate was $23.16), citing the impact of policy changes, including tariffs between the U.S. and China…”We delivered very strong performance in the first quarter in a more uncertain macroeconomic environment, and I'm incredibly proud of our team's execution.” (Extra kudos to Mr. Casper and whomever wrote his script for giving a nod to the team.)

Another way to look at how to manage guidance is through the lens of what came to be known as the “Rumsfeld matrix” when former secretary of defense Donald Rumsfeld talked about categorizing risks. Just like the military, companies should outline in earnings calls the “known knowns, and the known unknowns” and always remember that best practices encourage you to be as specific as possible. From there, you can skip the “unknown unknowns” and just keep the communications flowing as more issues become known. 

If tariff policy fluctuates again, as the TACO phenomenon continues, evaluate if there’s an opportunity to give the Street another update based on the newest information. Or give sell-side and institutional investors the formula to re-calibrate the impact themselves. 

The key takeaway remains the same: never stop communicating regardless of the impacts (positive or negative) and don’t pull guidance if you can isolate and quantify the impact of any unusual event. And, make sure to tell investors that you can only base your best guess on the information you have at any point in time, but promise to update as information comes to light. This approach will serve the company and its investors well every time and pay off in long-term shareholder value being enhanced.