George Gutowski

Say It Ain't So: Moody's Corp. Announces Dividend Before Earnings Release

I have sent an open letter to the SEC which I have also posted on my blog. The gist of it is as follows

Does declaring a dividend before an earnings announcement constitute an implied but ambiguous form of disclosure?

Rationale

Dividends are typically paid from net earnings. Usually corporate directors adopt a dividend pay out policy, which is predicated upon the boards view of earnings. Consistent and or consistently increasing dividends are viewed as excellent indicators of corporate financial health making ownership that much more desirable. Therefore dividends as declared quarterly are an implicit form of guidance emanating from the Board of Directors.