In a recent interview with blogger Steve Player, tw telecom CFO Mark Peters explained why providing a solid trend analysis works better than issuing formal guidance when it comes to tracking and steering his company's performance.

Steve Player: Do you give earnings guidance?

Mark Peters: We do not. We've never given earnings guidance, revenue guidance, EPS guidance, or cash flow guidance. We do provide CapEx guidance, because it is a large number and something that is useful for us to provide, at least within a range of expected spending. But giving guidance is something we have always considered a trap, and that was highlighted with the telecom implosion.

To say, "This is what the number is going to be next year or next quarter," is not as relevant as talking about the trends that we're seeing in our business. We don't know with certainty what our results are going to be in any given period. But we can explain what we see as the trends: our enterprise and carrier business, overall revenue, pricing and demand trends, and what we are feeling from the economy in this environment, etc.

SP: It's really bold to say that you are going to hit a prediction that is this specific number, when there are so many factors that go into it that are totally outside your control.

Peters: There are, and I think we've been pretty good at predicting our longer-term trends in our business. Where it becomes a trap -- and we've seen this in many companies -- is when they put out a prediction on revenue and EPS and then do artificial things to try to hit their guidance because they're afraid they are going to get crucified by Wall Street.

We don't believe in managing to the short term. If you manage for the short term, you're not going to have a long-term. Obviously you have to look tactically at the short term, but we're always looking at where we need to be one year, three years, five years from now, and that's why we're in such good position today.

For example, we made a conscious decision going into this recession that, if at all possible, we were going to avoid employee layoffs. We would take it as a bit of a failure if we had to layoff people, because that would mean we weren't planning properly. "Never say never," but being able to avoid large layoffs is a real advantage because it means we have avoided the disruption in productivity and morale they cause, plus we've retained the capacity to ramp up quickly once we return to higher growth with a stronger economy.

For more of Steve Player's discussion with Mark Peters, click here.