Should CFOs be Economic Pundits?

Kevin Kelleher, like me, listened to the Apple conference call yesterday. Both of us picked up on this exchange:

Mike Abramsky - RBC Capital Markets
And then final question, you haven't said anything in your call about economic headwinds. It's obviously something people are focusing on. It seems you are benefiting from resistance to some of those headwinds and also share gains. Any commentary you can offer in addition to the comments you've made that help us understand some of the kind of sustained drivers of that?
Peter Oppenheimer (Apple CFO)
We are going to leave economic commentary to others and we are focused on managing our business, which performed exceptionally well in the March quarter, and I credit it to just outstanding innovative products that drove amazing results.

I found Oppenheimer's response to be quite refreshing. Often investors and economists interested in the big picture are interested in what CFOs have to say about the economy, because those CFOs see how their customers are really behaving on a day-to-day basis. But CFOs are not economists, and when they start talking in vague terms about generalized economic slowdowns, it always sounds a bit like they're making excuses.

It's not Oppenheimer's job to prognosticate on the economy; if investors think that a recession will hurt Apple's sales, then they should reflect that view in terms of where they're willing to buy the stock, and of course the stock price is not something which CFOs should spend much if any time talking about.

Kelleher's view, however, is different:

Analysts tried to wring more data from Apple C.F.O. Peter Oppenheimer on the conference call with little result beyond some prickly responses. When one asked a question common on earnings calls these days--any thoughts on the overall economy?--Apple executives sniffed that they're not in the business of economic commentary.

Maybe, in economic times like this, good investor-relations protocol requires that CFOs pretend to be economists. But I'm still happy when they don't.

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