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alexpotatotoday at 12:59 AM10 repliesview on HN

One of my favorite stories about logistics and quarterly earnings deadlines (from when I worked at a pharmaceutical company:

"In our business, a truckload of various drugs can easily reach $10-$15 million. Now, if that truck arrives at the depot at 11:59pm March 31st then it's first quarter earnings. If it arrives at 12:01am April 1st then it's second quarter earnings.

$15 million is a BIG shortfall, even for us, so you better believe those truck drivers will roll the stop signs, blow red lights etc to make sure that truck arrives before 11:59pm"


Replies

fourseventytoday at 2:57 AM

That doesn't make any sense because the revenue is already booked for the sale which has nothing to do with when the delivery truck actually arrives.

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jbrozena22today at 3:47 AM

Over the long run, companies that spend resources on this micromanagement of earnings probably are not seeing the forest for the trees. I cringe thinking about how much time and top talent at a company is spent preparing for earnings rather than spending those hours improving the business itself.

donavanmtoday at 1:16 AM

I worked at a previous listed company where a single $6MM order of hardware being pushed out a week made quarterly p&l positive. Im absolutely sure the same situation occurred every other quarter as well in some part of the business I didnt see.

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randersontoday at 1:37 AM

Likewise, if you know you've already got the current quarter in the bag, but the next quarter is looking soft, you tell that truck driver to slow down!

aucisson_masquetoday at 9:34 AM

If you can't be arsed to ship it before the last day of the report, it's your fault and asking the truck driver to drive like a maniac to compensate is amateurish, dangerous.

That's not something I'd be proud of.

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golfertoday at 1:26 AM

Early in my career I worked at a place where the sales people would half-joke about signing deals on December 40th -- to claim it in the previous quarter/year.

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b40d-48b2-979etoday at 3:02 AM

Okay, what's that to say it won't be the same but even worse on a 6mo reporting schedule?

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drewdatoday at 3:12 AM

General Electric has a history of using that exact trick... just with jet engines and power generators and medical devices that can represent much larger amounts of revenue.

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themafiatoday at 2:43 AM

"We risk everyones lives in order to have a barely just-in-time warehouse on shipments in the low 8 figures."

Cool.

What company is this?

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mock-possumtoday at 7:18 AM

I don’t get it, why not just say “oh we were 15 million short that quarter and 15 million ahead this one so it’s all good”

Like why get hung up on these arbitrary cutoffs

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