Coca-Cola Co. is ending a long-cherished tradition on Wall Street—serving up earnings estimates.

The world’s largest soft-drink maker said on Friday it will no longer provide any quarterly or annual earnings per share guidance. In addition, the company said it will not update its outlook for full-year earnings per share expectations for 2003 as the year progresses.

Coke management said it will continue to provide investors with perspective on its value drivers, its strategic initiatives, and those factors critical to understanding its business and operating environment.

“Following a series of discussions with our board of directors over the past year, our management team has established a policy of not providing quarterly or annual earnings guidance,” said Coke chairman and chief executive Douglas Daft. “We believe that establishing short-term guidance prevents a more meaningful focus on the strategic initiatives that a company is taking to build its business and succeed over the long-run.”

For years, corporate executives have complained that Wall Street puts too much emphasis on short-term accomplishments, punishing the stocks of companies that come up short of the consensus analyst estimates.

This obsession with meeting consensus quarterly results led to sharp swings in stock prices during the late 1990s stock market bubble. It even spawned a new metric: the “earnings whisper.” During that market mania, companies were often expected to meet this unofficial quarterly or annual earnings estimate—an estimate that differed from the official published number.

“We are quite comfortable measuring our progress as we achieve it, instead of focusing on the establishment and attainment of public forecasts,” added Daft. “Our share owners are best served by this because we should not run our business based on short-term ‘expectations.’ We are managing this business for the long-term.”

Another Delay in Enron Auditor’s Sentence

David Duncan has received another stay of execution.

For the third time, a federal judge has reportedly postponed the sentencing of Arthur Andersen’s former top Enron Corp. auditor.

Duncan will now be sentenced on May 16 instead of January 3, according to the Associated Press.

In April Duncan pleaded guilty to one felony count of obstructing justice by ordering thousands of Enron documents destroyed between October 23 and November 9, 2001. At the time, Duncan was Andersen’s global managing partner on the Enron account.

“I accept that my conduct violated federal criminal law and I am willing to accept responsibility for it,” Duncan told the judge back then. “I know documents were in fact destroyed so that they would be unavailable to the SEC and others.”

Duncan’s sentencing was apparently delayed so prosecutors can continue to interview him as they continue their probe of Enron and Andersen. Duncan’s cooperation is reportedly a condition of his plea deal.

Duncan was initially scheduled to be sentenced in August. But that date was pushed back until October, and then January.

Duncan testified for the prosecution back in June during the Andersen trial. During that testimony, Duncan reportedly stated that he had ordered auditors on the Enron account to destroy paper and computer audit records that were unnecessary to support the final Enron audit.

Duncan’s confession helped prosecutors win their obstruction case against Andersen. The June guilty verdict effectively put the Big Five accounting firm out of business, and it closed down in late August.

Missouri Insurance Department Sues KPMG

Another one of the marquee accounting firms is being sued.

Late last week, the Missouri Department of Insurance sued KPMG, alleging the firm misrepresented the financial statements of client General American Life Insurance Co. The Missouri agency also claims KPMG didn’t disclose the risk of an investment product the life insurance company sold in the 1990s.

According to the AP, the suit alleges that KPMG served in conflicting roles as both consultant and auditor, advising General to develop and sell risky instruments called Stable Value funding agreements.

The Stable Value product was popular because it paid out high rates and could be redeemed with only seven days’ notice. But when the insurer’s ratings were downgraded back in August 1999, investors took advantage of the short cash-out period—demanding billions of dollars.

General had trouble meeting investor requests, however. This inability to cough up the cash stemmed solely from the short-notice requirement, said Eric Martin, chief counsel for the Missouri Department of Insurance, according to the wire service.

This provision eventually forced General American Holding Co. to go into receivership and sell its only significant asset—ownership interest in the insurance company—at a much lower price, according to the published account.

The Missouri Department of Insurance arranged for General American Life Insurance Co. to be sold to Met Life for $1.2 billion.

The lawsuit reportedly alleges that KPMG concealed information, failed to disclose the insurance company’s several-billion-dollar liability exposure, and failed to exercise due care in performing audits. The suit also claims KPMG tried to cover up its actions during the state’s investigation of the company’s liquidity crisis.

The Missouri agency is seeking unspecified damages in its lawsuit, said the report.

Financing News

Two large companies filed shelf registrations for large offerings of securities.

Wal-Mart Stores Inc. filed to offer up to $10 billion in debt securities from time to time.

The galaxy’s largest retailer plans to use the net proceeds to repay short-term borrowings, to finance acquisitions, to repay long-term debt, and for other general corporate purposes.

Part of the $10 billion includes $500 million in unsold debt securities from a previous registration.

ConAgra Foods Inc. filed to periodically sell up to $4 billion in debt securities and common and preferred stock.

The food company plans to use the net proceeds for working capital and capital expenditures, as well as for the repayment of commercial paper, loans under bank credit agreements, and other short- and intermediate-term borrowings, it said in the shelf-registration filing.

Meanwhile, Moody’s Investors Service changed the outlook on its long-term ratings of Merrill Lynch & Co. ‘s senior unsecured Aa3 debt to stable from negative.

“Merrill Lynch continues to make good progress in improving its core profitability in a challenging revenue environment,” the credit-rating agency said. “Each business—global markets, private clients, and asset management—has improved its productivity. As a result, Merrill Lynch has narrowed the gap between its operating margins and those of other comparably rated securities firms.”

Moody’s also placed the ratings of Bristol-Myers Squibb Co. (Aa2 long term and Prime-1 short term) on review for possible downgrade.

“The review is prompted by concerns regarding the company’s ability to complete its restatement in time to avoid a default under the bond indenture, and potential longer term implications of the restatement on the company’s underlying financial performance,” said Moody’s in its press release.

Bristol-Myers Squibb announced on October 24 that it expects to restate sales and earnings for the three years ended 2002 due to the previously disclosed wholesaler inventory buildup situation in its U.S. pharmaceuticals unit, and that its third-quarter filing will be delayed.

“As a result of the late 10-Q filing, the trustee of Bristol-Myers Squibb’s 1993 bond indenture (under which substantially all of the company’s $6.2 billion long term debt was issued) has the right to declare a notice of default,” Moody’s pointed out. “Unless the company cures its nonperformance within 90 days of the notice, the trustee would then have the right to declare the principal amount immediately due and payable.”

In initial public offering news, on Friday Converse Inc., which claims that its Chuck Taylor All Star sneakers are the best selling athletic shoes in history, said it plans to raise $86 million in an initial offering of stock.

The company said in a regulatory filing it plans to use the net proceeds to redeem outstanding preferred stock, to pay down a credit facility, to fund working capital, and for other general corporate purposes.

The company did not yet specify how many shares it plans to offer or its expected price range.

Converse reported $17.5 million in net income on $160.4 million in revenues for the nine-month period ended September 30, 2002.

Short Takes

• On Friday, shareholders of Reader’s Digest Association Inc. approved the company’s recapitalization plan. That plan will lead to the combining of all shares of the company’s class B voting common stock and class A nonvoting common stock into a single class of voting common stock. Holders of the new class of stock will get one vote per share.

Under the recapitalization agreement between the company and the DeWitt Wallace-Reader’s Digest Fund and the Lila Wallace-Reader’s Digest Fund, the company repurchased about 4.6 million shares of class B stock held by the funds for $100 million, at $21.75 per share.

• Companies with fewer than 50 workers experienced an average 14.7 percent increase in health-care costs in 2002, compared with a national average increase of 12.7 percent, according to the Philadelphia Inquirer, citing the Center for Studying Health System Change.