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Big US companies, analysts and fund managers will today call for the end of quarterly earnings guidance, saying that chief executives’ obsession with meeting forecasts damages shareholders and corporate governance.

The move by an influential slice of corporate America will increase pressure on US-listed groups to follow companies such as Pfizer, Intel and Motorola and stop focusing on short-term, self-imposed targets.

A widespread rejection of earnings guidance would mark a significant shift in US companies’ relationship with Wall Street and could change the way chief executives and fund managers are assessed and rewarded.

The call will come in a report to be released today by the Business Roundtable Institute for Corporate Ethics – part of an organisation made up of 160 leading US chief executives – and the CFA Institute, which groups more than 80,000 analysts and fund managers.

“The obsession with short-term results . . . leads to the unintended consequences of destroying long-term value, decreasing market efficiency, reducing investment returns, and impeding efforts to strengthen corporate governance,” it says.

The report says that scrapping guidance should be accompanied by changes in the way company executives and fund managers are paid, arguing that their pay is over-reliant on short-term yardsticks.

The research – based on 10 months of discussions with companies, investors, analysts and regulators – will bolster opponents of earnings guidance.

Chief executives argue that they are forced to provide forecasts because analysts and fund managers demand them. They fear that breaking with tradition would lead to sharp falls in their share prices.

Another recent survey, by the National Investor Relations Institute, found that just over half of US-listed companies offered earnings guidance every quarter, down by a third from 2003.

Some hedge funds like earnings guidance because it enables them to profit from discrepancies between forecasts and actual earnings. Analysts also tend to favour guidance as it makes forecasting easier.

However, the report argues that rolling three-month forecasts prevent management from focusing on the long-term health of the business.

Steve Odland, chief executive of the retailer Office Depot and head of the Business Roundtable corporate governance task force, said: “Once a company puts a number out there, everybody within the business is focused on hitting the guidance rather than doing what is best for the company.”

John Castellani, Business Roundtable president, said that although the 160 chief executives that make up his organisation had not yet officially adopted the report’s recommendations, it was clear that companies’ focus on the short-term “negatively affects behaviour and shareholder value”.