By: (AP) Thomson Corp.'s Thomson First Call unit, which compiles and distributes information on Wall Street estimates of companies' earnings, Wednesday said it will no longer use the word "consensus" when referring to the average analyst estimate.
Instead, the company will use "First Call mean" when discussing the mathematical average of the projections of several individual analysts on a company's future earnings per share.
First Call is "trying to be more precise," research director Chuck Hill said. "'Consensus' implies agreement [among analysts] and that's not what we're really doing. We're taking an average."
If First Call's switch catches on elsewhere, it would represent somewhat of a change in the vocabulary of Wall Street and the financial media. The term "consensus estimate" had become "generally accepted parlance in the industry," Hill said.
Hill said the move is in response to concerns from investor-relations executives, some of whom had feared that use of the word "consensus" could suggest collusion among analysts when projecting a company's earnings.
"We applaud this decision," said Louis Thompson, the president and chief executive of the National Investor Relations Institute. "Hopefully, it will diminish the securities market's and the media's focus on 'the number.'"
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