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When should companies issue profit warnings?

A firm should release a profit warning if it has material information which is likely to have a material effect on the price or value of its securities, or which may create a false market.

A profit warning is a declaration issued by a listed company to investors through a stock exchange, advising shareholders and the public that the company's earnings results will likely not meet expectations.

A company generally issues a profit warning prior to the public announcement of...

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