A
profit warning is a warning declaration issued by a
listed company to
investors through a
stock exchange. It warns investors that the profit of the company in the coming
Fiscal year will significantly decline when compared with that of the same quarter of previous year, or the company may even make a
Income statement. Investors should be aware of the possible
Income statement when buying or selling its
stock. For example, William Hill Bookmakers issued a profit warning on 23 March 2016 which they attributed to "a bad run of results and customers imposing betting limits on themselves".
[ William Hill issues profit warning after Cheltenham and online losses, The Guardian, 23 March 2016, accessed 6 April 2016] Company
share prices often fall following a profit warning being issued.
[ Rolls-Royce share price plunges after latest profit warning, The Guardian, 12 November 2015, accessed 6 April 2016]
Sometimes, "profit warning" is considered to be a neutral term and it refers to "estimated results improvement". Some companies may issue a "profit warning" to inform investors that their expected profit will obviously increase in the coming quarter. The expression has been criticized for being misleading and obscure, because it means profits are lower than expected or previously announced rather than a loss.[ Oxford English Dictionary,
]
target="_blank" rel="nofollow"> Profit warning, accessed 18 May 2017 It was a finalist for taboo word of the year in Germany in 2001,[ Die Unwörter von 2000 bis 2009 , Unwort des Jahres, accessed 18 May 2017] and in Austria in 2008.[ Pressemitteilung , Press release, accessed 18 May 2017]
