First-quarter earnings have been much stronger than people thought. Earnings will be 10 percent higher, it seems, than the expected 3 percent. Upside surprises have been announced in droves. And that reveals a new earnings game at play, which renews a stubborn controversy. Why have analysts at the top sell side firms so blatantly underestimated corporate earnings? More people are concluding that more companies are setting investors up for a positive surprise via their quarterly guidance. This occurs amid a big debate about whether Corporate America should do away with such guidance. Some feel it focuses people on the short-term. There have been several calls to do this, and some companies have ceased the practice. One big name, Google, decided from the start not to do so. But the practice also has some passionate defenders. It's a good way to communicate to shareholders, though there are some abuses that can creep in.

For more:
- here's a New York Times article